30-second overview: In 1962, the Taiwan Stock Exchange opened for business with just eighteen listed companies. Sixty-four years later, in early 2026, the TAIEX (Taiwan Capitalization Weighted Stock Index) broke through 30,000 points with over 1,050 listed companies and more than 13 million brokerage accounts. Along the way, the market survived the collective trauma of the 1990 bubble burst, the NT$94 billion Hung Yuan fraud that shattered public trust, a structural transformation that replaced retail speculators with institutional investors, and the ETF-and-TSMC-driven era of mass participation. The TAIEX is not just a number — it is the real-time heartbeat of Taiwan's economic confidence.
On February 12, 1990, the TAIEX surged to 12,682 points — an all-time high. Someone set off firecrackers outside the Taiwan Stock Exchange. At the time, roughly 4.6 million accounts were actively trading. Nearly every household had someone in the market, and retail investors accounted for 90% of total trading volume[^1]. Taxi drivers swapped stock tips. Grandmothers at the morning market placed orders through brokerage phone lines. Civil servants snuck glances at the ticker tape in their offices.
Eight months later, the index fell to 2,485. An 80% collapse.
No one set off firecrackers.
Eighteen Companies and a Quiet Beginning
The Taiwan Stock Exchange Corporation (TWSE) was established in October 1961 and officially opened on February 9, 1962. Its first chairman was Koo Chen-fu (a name that would later become synonymous with cross-strait diplomacy), and the initial batch of listed companies included Taiwan Cement, Taiwan Pulp & Paper, Taiwan Agriculture & Forestry, and Taiwan Industrial & Mining — eighteen firms in all[^2]. The stock market of that era felt like a small-town general store: not much on the shelves, not many customers, and trading so thin you could hear the rustle of paper.
The transformation began in the mid-1980s. Taiwan's economic miracle had accumulated vast private wealth. The New Taiwan dollar appreciated from 40 to 25 against the US dollar, instantly boosting exporters' purchasing power by 60%. All that money needed somewhere to go. In 1986, the TAIEX finally crossed 1,000 points — it had taken thirty-four years. Then, in less than three years, it blew past 10,000 in June 1989[^3].
Curator's Note
The saying "Taiwan qian yan jiaomou" (Taiwan's money is ankle-deep) — a folk expression meaning the island was drowning in cash — was born in this era. Too much money, too few places to put it. The stock market and real estate became enormous reservoirs. The problem was, those reservoirs had no spillway.
The Bubble, the Ponzi Scheme, and a Generation's Trauma
The 1990 crash was not just a decline in numbers. It destroyed an entire generation's trust in financial markets.
From 12,682 down to 2,485, countless investors bought every dip — "catching the bottom" three, five, ten times, each time certain the floor had arrived. Many families gave back everything they had earned in the bull market and then some. Homes were mortgaged. Retirement funds evaporated[^4]. Foreign hot money had already fled; the ones left holding the knife were all local retail investors.
Making matters worse was the Hung Yuan Company (Hongyuan Jigou). This underground investment firm had been collecting deposits from the public since 1981, offering a monthly interest rate of 4% — an annualized return of nearly 50%. At its peak, the scheme had absorbed NT$94 billion (roughly US$3.4 billion at the time). On January 9, 1990, Hung Yuan announced it would stop honoring withdrawals. More than 160,000 creditors lost everything overnight[^5]. The victims were disproportionately military personnel, government employees, and public school teachers — people who had poured their life savings and pensions into what seemed like a "guaranteed" return.
Contested Legacy
Hung Yuan's mastermind, Shen Chang-sheng, received a sentence of just seven years and was paroled in 1994. Of the NT$94 billion collected, only about NT$4 billion was ever recovered. The phrase "160,000 people's retirement savings traded for a seven-year sentence" became the most painful scar in the history of Taiwan's financial regulation.
The aftershocks of this double blow lasted a decade. Throughout the 1990s, "stocks" was a dirty word in many Taiwanese households. Parents warned their children: don't touch the stock market — it's just gambling.
The Institutional Era: From Casino to Capital Market
In the 2000s, the market's underlying structure began to change.
Foreign institutional ownership climbed steadily from under 5% in the early 1990s. The government relaxed restrictions on foreign investment through the QFII (Qualified Foreign Institutional Investor) system, channeling international capital into the market. Institutional investors gradually replaced retail speculators as the dominant force, and the prevailing logic shifted from "chasing hot tips" to "reading financial statements"[^6].
In June 2003, Yuanta Securities Investment Trust launched Taiwan's first ETF: the Yuanta Taiwan Top 50 ETF (ticker: 0050). This index fund, which tracks Taiwan's fifty largest listed companies, attracted little attention at launch. No one could have predicted that two decades later it would grow to nearly NT$1.4 trillion in assets under management with over 2.74 million beneficiaries, earning the nickname "the people's ETF"[^7].
What 0050 accomplished was deceptively simple: it allowed people who knew nothing about individual stocks to participate in Taiwan's economic growth. You didn't need to know what process node TSMC was manufacturing at; you just had to believe that Taiwan's top fifty companies, taken together, would trend upward over time. This was the starting point of passive investing in Taiwan.
TSMC's Gravitational Field
Discussing the Taiwan stock market without mentioning TSMC is like discussing the solar system without mentioning the sun.
As of March 2026, TSMC accounted for roughly 45% of the TAIEX by market-cap weighting. A one-dollar change in TSMC's share price moves the index by approximately eight points[^8]. A single company commanding nearly half the weight of an entire national stock market is extraordinarily rare among the world's major exchanges.
This is both the market's greatest strength and its most acute vulnerability. When TSMC thrives, the TAIEX thrives. When TSMC catches a cold, the TAIEX gets pneumonia. After the AI demand explosion beginning in 2024, TSMC's revenues hit record after record, with quarterly earnings per share reaching a historic NT$19.5, propelling the TAIEX from 20,000 all the way past 30,000[^9].
Curator's Note
Taiwan's greatest geopolitical risk and its greatest economic pillar are the same thing: semiconductors. The fate of the TAIEX is, to a significant degree, the fate of TSMC. Investors have grown accustomed to this reality, but familiarity is not the same as safety.
An Island of 13 Million Accounts
By the end of 2024, the cumulative number of brokerage accounts in Taiwan reached 13.21 million, with over 700,000 new accounts opened in a single year. On an island of 23.4 million people, more than half the population holds a securities account[^10].
The structural shift is even more striking: in 2024, investors under 30 accounted for 67% of all new account openings, and the number of investors aged 20 to 30 surpassed 1.72 million. The younger generation no longer sees stocks as gambling — they see them as a financial tool. Fractional share trading, dollar-cost averaging, and ETF subscriptions have become part of their daily routine.
From "stocks are gambling" in the 1990s to "not investing is the real risk" in the 2020s, it took Taiwan's society thirty years to complete this reversal.
| 1990 | 2026 |
|---|---|
| 4.6 million active accounts | 13.21 million accounts |
| Retail investors: 90% of volume | Institutions and ETFs steadily growing |
| Chasing tips, watching ticker tapes | Swiping phones, dollar-cost averaging |
| Underground schemes offering 4%/month | ETFs returning 5-8% annually |
| One firm's collapse wiped out 160,000 | One ETF serves 2.74 million beneficiaries |
After 30,000
In January 2026, the TAIEX crossed 30,000 points. No one set off firecrackers.
Not because the moment lacked excitement, but because the market had matured. The 10,000-point mark three decades earlier was a bubble inflated by retail traders rushing in and out. The 30,000 behind today's index is backed by TSMC's global market share, real revenue from the AI industry, and long-term capital from 13 million accounts. The difference between a bubble and a bull market is not the number — it is the structure of the capital underneath it[^11].
But risks have not disappeared; they have simply changed shape. TSMC's extreme 45% concentration in the index, geopolitical threats to the semiconductor supply chain, and the volatility introduced by day trading — which occasionally exceeds 40% of total daily volume — are all structural fault lines in the edifice of a 30,000-point market.
"In 1990, 4.6 million accounts pushed an island to 10,000 points, then watched it shatter. In 2026, 13 million accounts stand quietly above 30,000 — and most of them are holding not hot tips, but ETFs."
In 1962, eighteen companies. In 2026, one thousand and fifty. Over sixty-four years, Taiwan's capital market grew from a small-town general store into the world's tenth-largest stock exchange. People lost fortunes along the way, lost their minds, and made their fortunes too. But perhaps the biggest change is not in the index — it is in people's hearts. Has the era of "don't touch stocks" truly passed? Ask your parents and find out.
Further Reading
- Taiwan's Economic Miracle — The prequel to the stock market frenzy: how export-oriented industrialization created the era of "ankle-deep money"
- TSMC — The sun that accounts for 45% of the TAIEX
- Taiwan's Fintech Development — From columbarium speculation to digital payments: the other side of Taiwan's financial markets
References
[^1]: TechNews: 60 Years of Taiwan's Stock Market — From Institutional Dominance to Mass Participation — A retrospective on six decades of the TWSE, documenting the 1990s market structure where retail investors accounted for 90% of trading volume.
[^2]: TWSE: Historical Overview — The Taiwan Stock Exchange opened on February 9, 1962, under Chairman Koo Chen-fu, with eighteen companies including Taiwan Cement, Taiwan Pulp & Paper, Taiwan Agriculture & Forestry, and Taiwan Industrial & Mining.
[^3]: Wikipedia: Taiwan's Bubble Economy — The TAIEX crossed 1,000 in 1986, broke 10,000 in June 1989, and reached the all-time peak of 12,682 on February 12, 1990.
[^4]: United Daily News: Experts Recall the 1990 Stock Market Crash — First-person accounts of the eight-month collapse from 12,682 to 2,485, and the devastating experience of retail investors who tried to catch the bottom repeatedly.
[^5]: The News Lens: Hung Yuan — Taiwan's Largest-Ever Ponzi Scheme — Collected nearly NT$100 billion at a monthly interest rate of 4%. Its 1990 collapse left 160,000 victims, many of them military and civil service retirees.
[^6]: TechNews: 60 Years of Taiwan's Stock Market — The rise of foreign institutional ownership and the structural shift from retail-dominated to institutionally driven trading.
[^7]: StockFeel: Yuanta Taiwan Top 50 ETF (0050) — Launched in June 2003 as Taiwan's first ETF, 0050 has grown to nearly NT$1.4 trillion in AUM with over 2.74 million beneficiaries.
[^8]: StockFeel: What Are Heavyweight Stocks? — As of March 2026, TSMC accounts for 45% of the TAIEX weighting, with a one-dollar share price change moving the index by approximately 7.97 points.
[^9]: SinoTrade: Six Highlights from TSMC's Earnings Call — TSMC posted a record quarterly EPS of NT$19.5 in Q1 2026, with gross margin exceeding 62%.
[^10]: CNA: TWSE Accounts Among 20-to-30-Year-Olds Reach 1.6 Million — Total brokerage accounts reached 13.21 million by end of 2024, with investors under 30 accounting for 67% of new account openings.
[^11]: Taiwan News: Taiwan stock market hits record close above 30,000 — The TAIEX broke through 30,000 in January 2026, establishing a new all-time high.