Taiwan’s Stock Market and Capital Market: From the 1990 Collapse at 10,000 Points to the World’s Sixth Largest in 2026, an Island with 44% of Its Net Worth Staked on One Stock

30-second overview: On April 28, 2026, Taiwan’s total stock-market capitalization rose to US$4.47 trillion, overtaking Canada to become the world’s sixth-largest stock market; in mid-April, it had already surpassed the United Kingdom. The force behind it was TSMC — with a market capitalization of US$1.8 trillion and a weight of nearly 45% in the capitalization-weighted index. The 10,000-point crash thirty-six years earlier, which collectively erased 4.6 million accounts, and the Hung Yuan Group, which promised 4% monthly interest and ruined 160,000 people, have not yet dried out of the island’s financial memory. From just over a dozen listed companies in the year the stock exchange was founded to 13.93 million accounts sharing in the world’s sixth-largest capital market today, Taiwan took sixty-four years. But this sixth-place ranking contains a structural paradox: take away TSMC, and the other 1,000-plus stocks combined would probably just squeeze into roughly fifteenth place globally.

2026-04-28, a Bloomberg Terminal in New York

It was April 28, 2026, the middle of the night in Taipei. A Bloomberg Terminal flashed the headline: “Taiwan Overtakes Canada as World's Sixth-Largest Stock Market”¹.

The numbers were calm: the total market capitalization of Taiwan’s listed companies was US$4.47 trillion; Canada’s was US$4.44 trillion. By a margin of less than 1%, Taiwan’s stock market officially pushed aside this G7 country².

A few hours later, a taxi driver on Xinyi Road in Taipei switched the radio to a finance channel. The host was reading another record that had only just been broken that year: in April alone, the capitalization-weighted index had risen 7,200 points, a gain of 22.7%³. During intraday trading on the morning of April 27, it had touched 40,194.92 points, breaking through the 40,000 threshold for the first time in history⁴.

The driver did not look up. He said only: “TSMC can push for 2,500 this time.”

He did not know what headline Bloomberg had flashed, and he did not need to. For him, the stock-market condition of this island had always been compressed into the number of a single stock.

And his instinct was, in fact, the same conclusion reached by analysts around the world holding Bloomberg Terminals.

Firecrackers, the Stock Exchange, and the Retirement Savings of 160,000 People

To understand that red line in April 2026, one must first return to the black line of February 1990.

On February 12, 1990, Taiwan’s capitalization-weighted stock index surged to 12,682 points, its highest level in history. People set off firecrackers in front of the stock exchange⁵. At the time, there were about 4.6 million active trading accounts across Taiwan. Almost every household had someone buying stocks, and retail investors accounted for 90% of trading volume⁶. Taxi drivers discussed hot stock tips; aunties at traditional wet markets placed orders by phone through brokerage houses; civil servants secretly watched ticker displays in their offices.

Eight months later, the index had fallen to 2,485 points. It had lost 80%⁷.

📝 Curator’s Note
The phrase “money in Taiwan was so abundant it flooded up to people’s ankles” was a product of this era. There was too much money and too few places for it to go. The stock market and the property market became two reservoirs without spillways.

Worse still was the Hung Yuan Group. This underground investment company began taking in private funds in 1981 by offering “four fen” monthly interest, meaning a 4% monthly return. At its peak, it had absorbed NT$94 billion. On January 9, 1990, Hung Yuan announced that it would stop allowing withdrawals. More than 160,000 creditors lost everything overnight — most of them military personnel, civil servants, and teachers who had put in their retirement money and lifetime savings⁸.

⚠️ Contested View
Hung Yuan ringleader Shen Chang-sheng was sentenced to seven years in prison and fined NT$3 million; he was paroled in 1994⁹. “The retirement savings of 160,000 people exchanged for seven years in prison” remains one of the deepest scars in the history of Taiwan’s financial regulation. Even after Shen died suddenly in Xiamen in 2022, outsiders still suspected that the money funding his allegedly luxurious post-prison life had come from somewhere unexplained¹⁰.

The aftereffects of this double blow lasted a full decade. In many Taiwanese households in the 1990s, “stocks” was a dirty word. Parents warned their children: do not touch stocks; that is gambling.

Foreign Capital, ETFs, and TSMC’s Gravitational Field

The stock market of the new century was rewritten by three things.

The first was foreign capital. In the early 1990s, foreign ownership was below 5%. After the government relaxed restrictions and introduced the QFII system in the 2000s, it gradually rose. Institutional investors replaced retail investors as the main force, and the logic of trading shifted from “listening for hot tips” to “reading financial statements”⁶.

The second was ETFs. In June 2003, Yuanta Securities Investment Trust issued 0050, the Yuanta Taiwan 50, Taiwan’s first ETF. What it did was simple: allow people who did not understand individual stocks to participate in the overall growth of Taiwan’s top fifty companies. Twenty years later, the number of 0050 beneficiaries exceeded 2.74 million. Together with the later high-dividend ETF segment, ETFs became the default option for Taiwanese household financial management¹¹.

The third was larger than the first two combined: TSMC.

One cannot discuss Taiwan’s stock market in 2026 without discussing Taiwanese Company: TSMC. Taiwan’s stock market is like the solar system, and TSMC is the sun. As of March 10, 2026, TSMC’s weight in the capitalization-weighted index had reached 45.0041%¹². When its share price was around NT$2,265, every one-dollar movement in this single stock moved the broader index by about 8 points¹².

Calling this “an important constituent stock” would seriously understate the proportion. It had already become the market itself.

The New Year Red Envelope of January 5, 2026

On January 5, 2026, the second trading day of the Year of the Horse, the capitalization-weighted index gapped higher in morning trading. It touched 30,339.32 points intraday and closed at 30,105.04 points, officially entering the 30,000-point era¹³. That day, TSMC rose 5.36% and touched NT$1,695 intraday. This stock alone contributed about 680 points to the broader index. In two days, Taiwan’s stock-market value increased by NT$3.7 trillion, an average paper gain of NT$268,000 per investor¹³.

Behind this 30,000-point milestone lay a compressed timeline: after the 10,000-point bubble of 1990, Taiwan’s stock market took nearly thirty years to return to 10,000 points; it took seven years to move from 10,000 to 20,000; and it took only two years to move from 20,000 to 30,000.

✦ “That 10,000-point level thirty years ago was a bubble built by 4.6 million accounts rushing in and out. This 30,000-point level thirty-six years later is a ceiling held up by 13.93 million accounts sitting on ETFs, plus one TSMC. The index is a number in both cases; the capital structure is entirely different.”

By April 2026, that momentum had still not ended.

April’s 22.7% One-Month Surge

April was a transformative month for Taiwan’s stock market.

Around April 15, Taiwan’s total stock-market capitalization rose to US$4.14 trillion, surpassing the United Kingdom’s US$3.99 trillion and entering the ranks of the world’s seventh-largest stock markets¹⁴. During the same period, South Korea’s KOSPI also surpassed the United Kingdom at US$4.04 trillion, rising to eighth place. Within a single month, two East Asian semiconductor economies had crossed above an old G7 market at the same time¹⁵.

On April 24, the Financial Supervisory Commission formally approved the “TSMC clause”: the ceiling on a fund’s holdings in a single stock was relaxed from 10% to 25%. The next day, TSMC’s share price gapped higher and set a new record¹⁶.

At 9:25 a.m. on April 27, the capitalization-weighted index jumped to 40,194.92 points, touching 40,000 for the first time in history. Although it gave back gains late in the session and closed at 39,616.63 points, turnover reached NT$1.18 trillion⁴. Moore Investment Consulting analyst Adam Lin told the Taipei Times: “TSMC was the major driver of the Taiex's gains today.” He added that he was not worried it would fail to hold firm: “I expect TSMC will continue to move higher on its sound fundamentals.” (Quoted in Taipei Times, 2026-04-28.)

The day after the 40,000-point milestone, on April 28, Taiwan’s total stock-market capitalization rose to US$4.47 trillion, surpassing Canada’s US$4.44 trillion and becoming the world’s sixth largest¹. Over the whole of April, the capitalization-weighted index accumulated a gain of 22.7%, rising 7,200 points for the month — one of the most powerful single-month moves in the history of Taiwan’s stock market³.

There is a detail in this list worth pausing over: the top five are traditional financial heavyweight economies. Taiwan ranks sixth, followed by two members of the Group of Seven. An island three hundred times smaller than Canada and with a population 40% smaller than the United Kingdom had surpassed both of them at the scale of capital markets.

J.P. Morgan Asset Management put it bluntly in its 2026 outlook for Taiwan equities: “AI arms race” capital expenditure was driving strong growth in Taiwan’s exports and semiconductors; Taiwan stocks had risen by more than 90% over the previous three years; the price-to-earnings ratio had increased from 12.4 times to 17.7 times; and technology stocks accounted for as much as 70%-75% of Taiwan’s stock-market capitalization¹⁷.

Then it wrote one restrained sentence: “Industry concentration and valuation expansion may add volatility, making active stock selection an important key.”

The meaning of that sentence becomes clear only in the next section.

The 44% Watermelon Effect

On April 28, 2026, Taiwan’s stock-market capitalization was US$4.47 trillion. TSMC’s market capitalization was US$1.8 trillion, and its weight in the TAIEX was close to 45%¹¹⁸.

Translate that ratio into a more concrete picture: among more than 1,000 listed companies, the first-ranked company alone eats 45%; the remaining 1,000-plus companies together divide the remaining 55%.

📝 Curator’s Note
In April 2026, one scholar described it to the media this way: “TSMC is like a giant watermelon, sucking away all the nutrients from the other watermelons.” (As paraphrased by WantRich, 2026-04-25.) In economics, this metaphor has a formal name: “Dutch Disease.” It refers to the over-prosperity of a single industry absorbing an entire economy’s talent, capital, and land, eventually pushing even traditional industries and services to the margins¹⁹. The brighter Taiwan’s AI dividend becomes, the more locked in this structure becomes.

Alongside this 45% stand several other numbers.

In January 2026, Goldman Sachs released its report 2026 Investment Outlook: 10 Key Investment Trends. Led by Allen Chang, head of Greater China technology research, it selected 25 Taiwan stocks for its buy list: TSMC (2330), ASE Technology Holding (3711), Hon Hai (2317), Wistron (3231), Wiwynn (6669), Chicony Power? Wait: no, Qihong/Asia Vital Components (3017), Auras Technology (3324), Delta Electronics (2308), Taiwan Union Technology (2383), Largan Precision (3008), King Slide (2059), Chenbro (8210), MiTAC Holdings (3706), Sinher Technology (3376), Taiwan PCB Techvest? no, Elite Material (6274), Gold Circuit Electronics (2368), Nan Ya PCB (8046), and others²⁰.

The investment themes across the list were strikingly consistent: semiconductors, AI servers, optical transceiver modules, thermal modules, ODM manufacturers, PCs, smartphones, PCBs, L4 autonomous vehicles, and low-Earth-orbit satellites²⁰. Not one financial stock, not one consumer stock, not one traditional-industry leader.

In other words, when Goldman’s strategists looked at Taiwan’s US$4.47 trillion stock-market value and asked, “Where should investors bet next?”, their answer was: place the next bet on the same horse.

The report cards of active ETFs pointed in the same direction. As of April 29, the Nomura Taiwan High Dividend Fund had returned 89.58% year-to-date, Yuanta Duo Duo 77.56%, Uni-President Black Horse 75.30%, and Franklin Templeton SinoAm First Rich 75.09% — all of them more than doubling the broader market’s 36.45% performance²¹. What these funds had in common was that they bet on AI semiconductors, thermal management, power supplies, and high-speed transmission.

Across April, net foreign buying of Taiwan stocks at one point exceeded US$8.9 billion for the month; on April 21 alone, net buying reached NT$60.153 billion, the seventh-largest single-day figure in history²². Money flowed into this island from around the world, then was magnified into the market’s red line through the single stock of TSMC.

When efficiency is highest, fragility is also highest.

13.93 Million Accounts and One ETF

By the end of February 2026, the cumulative number of Taiwan stock accounts had reached 13.93 million, about 80,000 more than in January and a new record high for consecutive months²³. On an island with a total population of 23.4 million, nearly 60% of people had a securities account.

What is even more worth pausing over is the structure: investors under age 30 accounted for about 60% of newly opened accounts, and the 20-to-30 age group exceeded 1.7 million people. Day trading, odd-lot trading, regular fixed-amount investing, and ETF subscriptions are everyday tools for this generation. They are not very familiar with the word “ticker tape.”

From “stocks are gambling” in the 1990s to “not investing is the real risk” in the 2020s, Taiwanese society’s attitude toward capital markets took thirty years to reverse.

The left side of this table is traumatic memory; the right side is the AI dividend. Thirty-six years lie between them — but the line in between was not a straight climb upward.

The Same Index, Two Perspectives

On February 9, 1962, the stock exchange opened for business, with only a little more than a dozen companies in its first batch of listings²⁴. Sixty-four years later, on April 28, 2026, the capitalization-weighted index was within striking distance of 40,000 points, and total market capitalization had risen to sixth largest in the world.

Those sixty-four years make for a glamorous press release: from the industrial age of cement, paper, agriculture and forestry, and mining to the knowledge-economy age of wafer foundry, AI thermal management, and optical communications. Taiwan’s capital market spent one sixty-year cycle growing from a rural grocery store into the world’s sixth-largest stock exchange.

But this sixth place in 2026 contains a structural paradox.

Of Taiwan’s US$4.47 trillion stock-market capitalization, TSMC alone accounted for nearly 45%. If TSMC were removed from the capitalization-weighted index, the remaining 1,000-plus stocks would total about US$2.67 trillion — probably dropping Taiwan to somewhere around tenth place globally, in the same range as Saudi Arabia. In the world of capital markets, the relationship between the identity of “the world’s sixth largest” and “an island” is thinner than it appears.

✦ “On April 28, 2026, a Bloomberg Terminal in New York flashed ‘Taiwan Overtakes Canada.’ That same night, a taxi driver in Taipei waited by the radio for the next finance segment. What he cared about was not which G7 country Taiwan had surpassed, but whether TSMC would close at 2,300 tomorrow. Bloomberg’s headline wrote of ‘an island’s victory’; the driver cared about ‘the rank of one stock.’ The same event, two perspectives — and the latter may be closer to the truth than the former.”

The 1990 collapse from the 10,000-point level destroyed a generation’s trust in the stock market. The 2026 bull market that climbed to 40,000 and pushed past Canada rebuilt that same generation’s trust — except that this time, the object of trust had shifted from “the hot tip I picked myself” to “the TSMC that the whole world is buying.”

The summit on which these 13.93 million accounts stand together has a foundation that is 45% the same rock. The rock is hard, but there is only one of it.

What will Taiwan’s capital market learn over the next thirty years? Ask the neighbor who tried to buy the bottom three times in 1990 and you will probably get the answer: the most dangerous moment in a market is precisely the moment when everyone thinks it will not fall.

Further Reading

• Taiwanese Company: TSMC — the sun that accounts for 45% of Taiwan’s stock-market weight, and the story behind the phrase “sacred mountain protecting the nation”
• Semiconductor Industry — the entire supply-chain ecosystem that supports Taiwan’s identity as the sixth-largest stock market
• Taiwanese Company: Hon Hai Precision — another heavyweight in Goldman Sachs’s 25-stock buy list, from contract-manufacturing giant to AI-server transformer
• Taiwan’s Industrial Transformation and Upgrading — the trajectory from 1980s contract manufacturing to the 2026 AI dividend
• Taiwan Economic Miracle — the money from the era when “money flooded up to people’s ankles” eventually flowed into the 1990 stock market and Hung Yuan
• Development of Financial Technology in Taiwan — from brokerage-phone orders to fixed-amount investing by smartphone, the financial infrastructure behind a single account
• Apple Sidra — the chain of equity transfers at Oceanic Beverages, listed in 1965 under stock code 1213, as a miniature case of two capital-history nodes: the 1985 Tenth Credit Cooperative scandal and the 1990 Hung Yuan case

References