Taiwanese equities have emerged as one of Asia's top performers in 2026, with the TAIEX gaining 58% year-to-date, extending its annual winning streak to a fourth consecutive year, according to latest reports from LiveMint. The index closed Friday's session 0.8% higher at 46,349, reaching its highest level since July 6th. The rally has been driven primarily by chip stocks, which have benefited from aggressive spending by technology giants to scale up AI infrastructure since OpenAI's ChatGPT ignited the artificial intelligence boom in 2022. The latest gains were significantly boosted by Nvidia's impressive quarterly performance, with the company's revenue more than doubling to $96.2 billion and adjusted profit coming in at $2.22 per share.
Nvidia's blockbuster second-quarter numbers, along with its upbeat outlook, not only ignited a chip rally on Wall Street but also lifted global markets, including Taiwan, as reported by LiveMint. The US chip giant now expects revenue to grow by approximately 70% in fiscal 2028, suggesting that demand for chips powering artificial intelligence projects remains strong. TSMC, the world's largest contract chipmaker, rose 0.4% on Friday's session, with the company accounting for nearly 40% of the TAIEX's total market value and being a key manufacturer of Nvidia's advanced AI chips. Nvidia is estimated to account for more than 20% of TSMC's total annual revenue in 2026, making it the Taiwanese chipmaker's largest customer, though TSMC does not disclose individual customer revenue figures in its quarterly earnings reports.
Despite the strong performance, the index has experienced significant volatility in recent weeks, with the TAIEX retreating around 7.2% from its June peak and suffering its biggest monthly decline since March, falling 6.65% in July, according to LiveMint reports. However, the index has recovered all of those losses in August, rising 6.62% so far, with only one trading session left in the month. In July alone, foreign investors pulled $22.95 billion from Taiwanese equities, while the index suffered its biggest single-day point decline on record during the month. The near-parabolic rally has raised concerns about sustainability as investors question whether soaring valuations are justified, particularly amid uncertainty over whether hyperscalers' massive AI investments will generate sustainable returns.
Among the standout performers in Taiwan's 2026 rally, Walsin Technology Corp surged 10% to close at 313.50, followed by BizLink Holding Inc climbing 9.98% to 2,260 and Wieson Technologies Co Ltd gaining 9.96% to end at 26.50, as reported by LiveMint. MediaTek jumped 1.9% and Delta Electronics advanced 2.2%, while major memory chip supplier Nanya Technology was up 0.2%. TSMC shares gained around 56% and ASE Technology Holding posted strong gains of 135%. However, Mirle Automation Corp was among the biggest losers, falling 9.95% to 190, while Lianyou Metals Co Ltd declined 6.27% to 1,495 and Top Bright Holding Co Ltd dropped 6.23% to close at 271.
According to KC Securities analysis, the TAIEX faces resistance at 45,400, followed by 45,650 and 45,800, while support levels are placed at 44,800, 44,500, and 44,200. The overall trend for the index remains bullish, with the technical analysis suggesting potential resistance levels ahead. As per Bonanza analyst Nitant Darekar, the move is far narrower than the headline suggests, with strength broadening into advanced packaging, ASIC, and power sectors, while traditional manufacturing counters have generally trailed the technology-led advance. The rally has been supported by earnings upgrades, foreign inflows, and relaxed single-stock fund limits, though selected non-AI cyclical stocks have remained relative underperformers compared with semiconductor, AI, and other technology-related names.
