Taiwan overtakes India as AI chip demand fuels market surge

Taiwan has overtaken India as the world’s fifth-largest stock market, driven by a surge in TSMC shares amid booming AI chip demand, while India’s market lags behind.

Taiwan has surpassed India to become the world’s fifth-largest stock market, with a market capitalization of $4.95 trillion, just ahead of India’s $4.92 trillion. This shift is primarily driven by soaring demand for artificial intelligence (AI) chips, which has fueled a significant rally in shares of Taiwan Semiconductor Manufacturing Company (TSMC). TSMC now represents over 42% of Taiwan’s main stock index, and its stock price has surged nearly 50% in 2026. The AI boom has boosted global investor confidence in Taiwan’s semiconductor sector, leading foreign investors to shift capital from Indian equities to Taiwan and South Korea. Meanwhile, India’s equity market has underperformed this year, with its main indices declining and its attractiveness among emerging market investors diminishing. Taiwan’s rapid rise highlights the growing influence of hardware-centric economies in the global financial landscape.