In a remarkable surge, the Taiwan Stock Exchange (TAIEX) closed the year with a 28.47% gain, marking its highest annual increase since 2009. This surge was predominantly attributed to the flourishing artificial intelligence (AI) sector. Despite a slight dip of 0.67% in the final trading session, the TAIEX ended at 23,035.1, securing its position as the second-best performing market globally, following closely behind the technology-centric NASDAQ index, which boasted a 31.97% increase.

Throughout the year, the Taiwan Stock Exchange witnessed a substantial market turnover of NT$99.81 trillion (US$3.04 trillion), surpassing the previous year’s record. The market capitalization soared by NT$17.1 trillion to NT$73.9 trillion, translating to an average earning of nearly NT$1.3 million per investor on the main board. Notably, despite foreign portfolio managers and proprietary dealers reducing their stakes, investment trust funds injected NT$832.2 billion, aligning with the growing preference for exchange-traded funds (ETFs) among local retail investors.

Taiwan Semiconductor Manufacturing Co (TSMC) emerged as a stellar performer, with its shares surging by 81.28% and closing at NT$1,075. TSMC’s robust performance was underpinned by the increasing optimism surrounding AI applications and its strong financial performance. The company’s market capitalization skyrocketed by NT$12.5 trillion, making a significant contribution to the TAIEX’s overall gains for the year.

Looking ahead, industry experts anticipate a bullish trend for the TAIEX, with forecasts suggesting a rally above 24,000 points. TSMC is expected to further enhance its sales by double-digit percentages over the next five years, supported by substantial investments from US tech giants in cloud computing and AI applications. Notably, securities firms project a 15.2% increase in corporate profits for the year, with electronics companies anticipated to achieve even higher growth rates of 30%, attributed to their superior pricing strategies and operational efficiency.

In contrast to the stock market’s success, the New Taiwan dollar experienced a depreciation of 6.24% against the US dollar, reaching NT$32.781. Despite this, the currency’s performance outshone that of other Asian currencies such as the won and yen, which witnessed more significant declines. The flow of global funds towards the US dollar was influenced by higher interest rates in the US and concerns over potential tariff escalations following the upcoming change in US administration.

Overall, the TAIEX’s exceptional performance in 2025 underscores Taiwan’s resilience in the global financial landscape, driven by the booming AI sector and the stellar performance of key players like TSMC. The market’s record-breaking achievements and optimistic outlook position Taiwan as a key player in the evolving landscape of international finance.