Taiwan stock market outperforms Japan, South Korea: Central bank

Taipei, Dec. 27 (CNA) Taiwan's stock market has outperformed markets in Japan and South Korea over the past four years because of the strong growth in artificial intelligence hardware, a strength of Taiwan's economy, the country's central bank said recently.

The central bank said the Taiwan Stock Exchange's benchmark index -- the Taiex -- has risen about 120 percent from a low of 12,666 points in 2022 to 27,867 on Dec. 15, 2025.

That gain beat out the 103 percent rise in Japan's Nikkei 225 index and the 89.8 percent rise in South Korea's KOSPI Composite Index since 2022, even if those markets also list several tech stocks, Taiwan's central bank said in a statement recently.

In addition to benefiting from the AI boom, these Asian stock markets were helped by ample liquidity generated by the loose monetary policies of the U.S. Federal Reserve and other major central banks, the central bank said.

The tech-heavy Nasdaq index in the United States has been the best market performer in the world over the past four years, surging about 125.8 percent since 2022.

Like the Nasdaq, the Taiex has particularly benefited from the ongoing AI boom because Taiwan ships large quantities of AI chips and it accounts for 90 percent of AI server assembly, the central bank said.

Despite fears of an AI investment bubble, the central bank said it believed AI applications will continue to expand from cloud services to end users, and moves by many countries to intensify their development of Sovereign AI should further expand the AI market.

Citing a report by the government-sponsored Industrial Technology Research Institute, the central bank said that with generative AI (GenAI) growing at a fast pace, the global AI market will grow at a compound annual growth rate (CAGR) of 32 percent a year from 2024 to 2029 to reach US$1.26 trillion in 2029.

The CAGR is expected to reach 56 percent for GenAI alone during the same period, the ITRI report showed.

The central bank said AI applications for end-users still need more time to mature and therefore downside risks are possible for the global supply chain, which could create uncertainty over the local economy.

Corrections will occur over time, however, and the evolution of AI technology will evolve and pave the way for longer term economic growth, the central bank said.