Taiwan's Stock Market Has Surged 149% Since 2024. AI Is Turning Ordinary Households Into Investors.
The TAIEX, Taiwan's benchmark stock index, has delivered a 149% gain since the beginning of 2024, and the effects are rippling well beyond trading floors. Approximately 20% of the average Taiwanese household's wealth is now held in equities, a significantly higher share than most developed economies. When AI chip stocks rise, Taiwanese households feel it directly in their net worth.
That wealth effect is translating into real economic behavior. Consumer spending has picked up, retail activity is expanding, and the positive cycle of rising asset values driving consumption is increasingly visible in the economic data. Taiwan Semiconductor Manufacturing Company remains the engine at the center of all of it. TSMC reported a 58% year-on-year jump in profit in the first quarter of 2026, citing surging AI demand, and its stock continues to carry significant weight in both the TAIEX and global technology indices.
Taiwan is not alone in this dynamic. South Korea's KOSPI has surged roughly 219% since the beginning of 2024, outpacing even Taiwan's extraordinary run. Korean individuals bought approximately $33.8 billion in equities in just the first five months of 2026, reversing a $13.5 billion net sale across all of 2025. Since November 2025, Korean financials, Taiwanese financials, and Korean retail have had their 2026 earnings forecasts upgraded by 67%, 11%, and 8% respectively, according to FactSet consensus estimates.
The underlying driver is straightforward: both countries are deeply embedded in the global AI supply chain. Taiwan produces approximately 90% of the world's most advanced chips, with TSMC serving Nvidia, Apple, Alphabet, Meta, and Amazon as top customers. South Korea's Samsung and SK Hynix dominate global memory chip production. Every dollar that hyperscalers spend on AI infrastructure flows, in significant part, through these two countries.
The risk worth acknowledging is concentration. Both economies are substantially dependent on the continuation of AI capital spending by a handful of major US and Chinese technology companies. If that spending slows, whether due to a regulatory shift, a capital markets correction, or a technology setback, the wealth effect reverses. For now, the data shows no sign of that happening, and the positive wealth effects in both countries are expected to accelerate domestic consumption further through the second half of 2026.
