Chair of the Taiwan Stock Exchange on the index’s near future

Sherman Lin has a simple pitch for Taiwan: don’t think of it as just another market, think of it as a technology island. The chair of the Taiwan Stock Exchange said the island’s west coast is dotted with industrial cities that make tech part of the place’s DNA. That’s not marketing fluff. It is also a reminder that Taiwan’s market story is still tightly tied to the hardware economy that runs through it.

The numbers show how concentrated that story is. Taiwan became the world’s fifth-largest stock market by total value in May, according to Bloomberg calculations, trailing only the U.S., mainland China, Japan and Hong Kong. But the TAIEX benchmark is still heavily shaped by one company: TSMC accounts for 40% of the index. This year, the TAIEX is up about 55%, while TSMC is up 50%.

That is why Lin and his team are trying to widen the market’s appeal. They want investors to look beyond TSMC to other names in the AI supply chain and to what Lin calls “hidden champions” — profitable businesses that can be easy to miss if your eyes are fixed on the biggest electronics companies. The exchange is also nudging companies toward better corporate governance through its Power Up program, borrowing from the playbook used in Japan and South Korea.

Taiwan still has ground to cover. Last year it raised $3.3 billion across 70 IPOs, a record for its stock exchanges, but nowhere near Hong Kong’s $37.4 billion across 119 deals. The market also keeps odd hours, closing at 1:30 PM. Lin has floated longer trading hours before, only to have Taiwan’s top regulator dismiss the idea as not a priority. For now, he’s betting AI can give Taiwan a bigger profile, even if the boost may not last forever. He says the island’s real edge is not one or two star companies, but the world’s most complete and competitive AI ecosystem.