Taiwan's stock market surpasses the UK's despite having less than a quarter of the UK's economy — AI boom propels Taiwan forward, TSMC alone accounts for more than 40% of Taiwan's total market value

Taiwan's stock market is now worth more than the United Kingdom's, according to recent Bloomberg data, in a shift driven almost entirely by the insatiable global appetite for AI chips. The island's listed companies carry a combined valuation of roughly $4.3 trillion, edging past Europe's largest equity market, despite Taiwan's economy being less than a quarter the size of the UK's. South Korea, powered by Samsung and SK hynix, is roughly $140 billion behind and closing fast.

As for Taiwan’s stock market constituents, TSMC makes up the bulk, with a market cap of approximately US$1.98 trillion, or 40% of Taiwan’s entire stock market value. No other major economy has this degree of single-company dependence. By comparison, Apple represents roughly 7% of the S&P 500.

On Thursday, Taiwan's Financial Supervisory Commission raised the single-stock investment cap for local equity funds from 10% to 25% of a fund's net asset value. The change applies only to companies whose market weighting exceeds 10%, a threshold TSMC alone meets. That adjustment triggered a 4.3% jump in TSMC shares on Friday and pushed the benchmark TAIEX up 2.7%, according to Taiwanese media.

TSMC reported record first-quarter earnings last week, with net income up 40.6% year-over-year to roughly $18 billion. The company raised its full-year revenue guidance to more than 30% growth and confirmed plans to add another 3nm fab to meet AI demand, which it expects to outstrip supply through 2027.

South Korea's market, KOSPI, has already overtaken both Germany and France this year and is up 44% in 2026. Samsung and SK hynix account for nearly half the index's total weighting. The former’s share price has nearly quadrupled since the start of 2025, while SK hynix has risen roughly sixfold over the same period. These gains reflect the ongoing memory supercycle, with demand for HBM far exceeding current production capacity.

William Bratton, head of cash equity research for Asia-Pacific at BNP Paribas, told the Financial Times that, aside from ASML, European-listed equities have almost no exposure to the current AI hardware buildout. He added that South Korea could overtake the UK as well if the current rally continues.

The disparity between these semiconductor-heavy Asian markets and Europe highlights how narrowly the financial benefits of the AI infrastructure boom are distributed. Taiwan's GDP is roughly $977 billion, according to IMF estimates, versus the UK's $4.3 trillion. While the gap between those two economies hasn’t changed, the gap between their stock markets has.

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