Last week the Taiwanese stock market overtook the UK to become the world’s seventh largest market at a little over $4trillion in value.
It is worth noting that Nvidia has a market cap of almost $5trillion. Everything is relative and in the case of Taiwan it’s all about Taiwan Semiconductor Manufacturing Company (better known as TSMC). They make all the world’s important chips (including for Nvidia) and with AI demand surging so is their revenue and profits.
The Taiwanese index is called the TAIEX and is up some 16% in April alone as TSMC surges higher.
Top 10 holdings
| Company | Ticker | Weight | |
|---|---|---|---|
| Taiwan Semiconductor Manufacturing (TSMC) | 2330 | 20.81% | |
| Delta Electronics | 2308 | 5.50% | |
| MediaTek | 2454 | 4.16% | |
| Hon Hai Precision (Foxconn) | 2317 | 3.65% | |
| ASE Technology Holding | 3711 | 2.72% | |
| Elite Material | 2383 | 2.58% | |
| Accton Technology | 2345 | 2.27% | |
| Unimicron Technology | 3037 | 2.19% | |
| Asia Vital Components | 3017 | 1.82% | |
| CTBC Financial Holding | 2891 | 1.58% |
Top ten is a little under 50% of the index, but as the above shows TSMC is the monster in the index with tech at around 66% and financials at 15%.
The composition beyond TSMC tells the real story: Delta (power electronics for AI servers), Hon Hai (server assembly), ASE and Unimicron (advanced packaging and IC substrates), Accton (data-centre switches), Asia Vital Components (server cooling), and Elite Material (high-speed copper-clad laminates) are all plays on the same AI infrastructure build-out. CTBC Financial is the only non-tech name in the top 10.
The index uses the MSCI 25/50 methodology which means no individual stock can be more than 25% of the index and all the +5% stocks can not be more than 50% of the index.
Geopolitical Risk: The Unavoidable Conversation
Taiwan sits at the centre of the US-China strategic competition. China claims sovereignty over Taiwan; the US maintains strategic ambiguity about defending it. Any escalation in the Taiwan Strait; military posturing, economic blockade, or actual conflict would be catastrophic for Taiwan and TSMC.
On the flip side a US-Taiwan trade agreement signed in February 2026 reduced reciprocal tariffs from 20% to 15%, a near-term tailwind for Taiwanese tech exports. This has contributed to the April rally.
But that geopolitical risk is real and permanent. It’s probably priced in as best it can be. But in truth it’s never fully priced in because the tail event, if it occurred, would be catastrophic and there are reports that TSMC will destroy all their Taiwanese factories in the event of a Chinese attack on the country to prevent the tech falling into Chinese hands.
For those wanting some extreme tech/AI ETF with a hint of political threats. There’s an ETF for you, details below.
| ETF name | iShares MSCI Taiwan ETF |
| NYSE code | EWT |
| ETF issuer | BlackRock (iShares) |
| Issue date | 2000 |
| Total investment cost | 0.59% |
| ETF Benchmark | MSCI Taiwan 25/50 Index (mid and large cap Taiwanese equities) |
| Tax-free savings account | NO |
| Market cap | $8billion |
| Dividend yield | ±3.5% |
ETF blog
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.
