The Taiwan Stock Exchange (TAIEX) closed the year with a remarkable surge, marking its highest annual gain since 2009. Data from the Taiwan Stock Exchange revealed that the TAIEX concluded the year with a 28.47 percent increase, attributed to the flourishing artificial intelligence (AI) sector. Despite a slight dip of 0.67 percent to 23,035.1 on the final day of trading due to profit-taking activities, the TAIEX still ranked as the second-best performing market globally, following the NASDAQ index with a gain of 31.97 percent.

Throughout the year, the market turnover on the Taiwan Stock Exchange soared to a record-breaking NT$99.81 trillion (US$3.04 trillion), surpassing the previous high set in 2021. The surge in market capitalization by NT$17.1 trillion to NT$73.9 trillion translated to substantial gains for investors, with each main board investor earning nearly NT$1.3 million. Notably, the number of registered investors on the local stock market reached 13.18 million by the end of November.

Despite foreign portfolio managers and proprietary dealers reducing their stakes in local shares, investment trust funds played a pivotal role by injecting NT$832.2 billion into the market, aligning with the increasing popularity of exchange-traded funds (ETFs) among local retail investors. ETFs attracted an additional NT$200 billion, reaching NT$2.9 trillion in total, despite market volatility in the latter half of the year.

Taiwan Semiconductor Manufacturing Co (TSMC) emerged as a key player in driving the market upswing, with its shares surging by 81.28 percent during the year, closing at NT$1,075. This growth was fueled by optimism surrounding AI applications and the company’s robust financial performance. TSMC’s market capitalization skyrocketed by NT$12.5 trillion from the previous year, contributing significantly to the TAIEX’s overall gains.

Market analysts anticipate a positive outlook for TSMC, especially with the company’s strategic positioning in chipmaking processes. TSMC’s upcoming investors’ conference is expected to shed light on its business prospects for the new year, building on its better-than-expected results from the previous quarter. Securities firms project that the TAIEX is poised to surpass 24,000 points this year, with TSMC forecasted to achieve double-digit sales growth over the next five years.

While corporate profits are projected to expand by 15.2 percent overall this year, electronics companies are expected to outperform, with an estimated 30 percent growth attributed to their adept pricing strategies and operational efficiency. Despite the New Taiwan dollar weakening by 6.24 percent against the US dollar, it fared relatively better compared to other Asian currencies like the won and yen, which experienced more substantial declines.

In conclusion, the TAIEX’s stellar performance in 2025 underscores Taiwan’s robust financial market and the significant contributions of key players like TSMC in driving economic growth and investor confidence.