Taiwan stocks surge as AI boom drives fastest growth since 1987

Taiwan’s stock market extended its strong artificial intelligence-fueled rally in April, with investors pouring into semiconductor and technology shares as AI demand continued lifting exports and economic growth.

Summary

• Taiwan’s TWSE Index climbed 22.7% in April as AI-related semiconductor demand pushed first-quarter GDP growth to 13.7%, the fastest since 1987.
• Technology stocks accounted for 79% of market turnover, while average daily trading volume surged 187% year-over-year to NT$1.23 trillion.
• Margin loan balances hit a record NT$641 billion as investors increased exposure to Taiwan’s AI and semiconductor sectors.

According to Bank of America, the TWSE Index climbed 22.7% month-over-month to 38,926.63 and is now up 34.4% since the start of the year.

Technology stocks remained the main driver of trading activity across the market. The sector accounted for 79% of total turnover during the second quarter to date, while average daily turnover surged 187% year-over-year to about $38.9 billion.

Taiwan’s total stock market capitalization also rose 18% in April to $4 trillion, with technology companies making up more than four-fifths of the market.

The rally comes as Taiwan continues benefiting from global demand for AI infrastructure, chips, and cloud computing hardware. First-quarter GDP expanded 13.7% year-over-year, the fastest pace recorded since 1987, supported largely by AI-related exports. March exports jumped 61.8% from a year earlier and reached a record monthly high of $80 billion as shipments tied to advanced computing and semiconductor supply chains accelerated.

Investor activity has also intensified across leveraged trading and exchange-traded funds. Margin loan balances climbed 23% month-over-month to a record NT$641 billion, while Taiwan-listed ETFs attracted NT$1.5 trillion in new assets this year. Active long-only funds maintained near-record overweight positions on Taiwan equities in March, with semiconductor companies remaining the most favored sector among institutional investors.

The latest gains highlight how central Taiwan has become to the global AI supply chain. Companies linked to advanced chip manufacturing, AI servers, and cloud infrastructure have seen rising demand as firms worldwide race to expand AI computing capacity.

NVIDIA’s continued dominance in AI processors has also helped strengthen sentiment toward Taiwan’s semiconductor ecosystem, particularly suppliers connected to high-end chip packaging and production.

At the same time, signs of overheating are beginning to draw attention. Consumer inflation accelerated to 1.74% in April from 1.2% in March, partly driven by higher energy costs. The Taiwan dollar also appreciated against the U.S. dollar during the month as foreign capital continued flowing into local equities.

The AI spending wave continues to reshape global markets beyond Taiwan. Microsoft, Amazon, Meta, and Google have all announced plans to invest billions of dollars into AI data centers and computing infrastructure this year.

Analysts expect demand for advanced semiconductors and AI hardware to remain strong through 2026 as companies expand cloud and generative AI services worldwide.