Taiwan’s equity market has emerged as the clear regional leader over the past four years, outperforming both Japan and South Korea as global demand for artificial intelligence hardware accelerated.
According to data cited by Taiwan’s central bank, the rally reflects the island’s pivotal role in the AI supply chain, combined with favorable global liquidity conditions and solid domestic economic performance.
From the market low in 2022 through December 15, 2025, Taiwan’s benchmark Taiex delivered gains that surpassed its regional peers. The advance highlights how structural exposure to next-generation technologies can translate into sustained equity outperformance.
How Taiwan Outpaced Japan and South Korea
The central bank estimates that the Taiex climbed roughly 120%, rising from around 12,666 points to 27,867 points over the period. By comparison, Japan’s Nikkei 225 advanced about 103%, while South Korea’s KOSPI gained approximately 89.8%.
While all three markets benefited from supportive global conditions, Taiwan’s heavier concentration in high-growth technology sectors allowed it to capture a larger share of the upside. On a global scale, the U.S. tech-focused Nasdaq Composite was the strongest performer during the same period, surging about 125.8%.
AI Hardware Demand as the Primary Catalyst
The central bank attributed Taiwan’s outperformance primarily to the global AI boom. Taiwan occupies a critical position in the semiconductor and hardware ecosystem, supplying key components that power data centers, advanced computing, and AI model training.
At the center of this ecosystem is TSMC, whose manufacturing capabilities underpin much of the world’s advanced chip production. As investment in AI infrastructure accelerated, companies tied to this supply chain saw sustained demand, lifting earnings expectations and equity valuations across Taiwan’s market.
Liquidity and Global Monetary Conditions
Beyond technology leadership, broader financial conditions also played a role. The central bank noted that Taiwan, Japan, and South Korea all benefited from ample global liquidity. Loose monetary policies adopted by the U.S. Federal Reserve and other major central banks supported risk assets worldwide, creating a favorable environment for equities.
However, Taiwan’s market appeared better positioned to translate that liquidity into durable gains, given the structural demand for its technology exports rather than reliance on cyclical or domestic-only growth drivers.
Economic Strength Reinforces Market Performance
Taiwan’s strong macroeconomic performance in 2025 provided additional support. The central bank highlighted that the island’s GDP per capita surpassed both South Korea and Japan, underscoring improvements in productivity and income levels.
This economic strength reinforced investor confidence, helping sustain the equity rally as global capital sought exposure to markets with both technological relevance and solid fundamentals.
Bottom Line
Taiwan’s stock market outperformance over the past four years reflects more than cyclical momentum. It underscores how deep integration into the global AI hardware supply chain, combined with supportive liquidity and improving economic fundamentals, can drive sustained equity leadership. As AI investment continues to shape global capital flows, Taiwan’s experience illustrates the market impact of being at the center of a transformative technological shift.
