NextFin News - The Taiwan Stock Exchange (TWSE) witnessed a historic milestone on Monday, January 26, 2026, as the benchmark TAIEX index surged to a record high of 32,000 points. This rally was primarily fueled by the sustained global demand for artificial intelligence (AI) hardware and the high-profile arrival of Nvidia CEO Jensen Huang in Taipei. According to SETN, the market's upward trajectory has been characterized by five consecutive weeks of gains, with combined turnover on the main board and the over-the-counter market recently exceeding NT$1 trillion. The surge reflects a broader investor confidence in Taiwan’s semiconductor ecosystem, which remains the backbone of the global AI infrastructure.
The immediate catalyst for Monday's performance was the anticipation surrounding Huang’s visit to Taiwan to sign new strategic agreements and attend Nvidia’s annual year-end festivities. This visit follows Huang’s recent remarks at the World Economic Forum in Davos, where he dismissed concerns of an AI bubble, citing "off the charts" demand for graphics processing units (GPUs). According to The Straits Times, Nvidia’s latest financial forecasts have consistently outperformed Wall Street estimates, with quarterly revenue projections reaching approximately $65 billion. This optimism has trickled down to Taiwanese suppliers, most notably Taiwan Semiconductor Manufacturing Co (TSMC), which recently reported record-breaking fourth-quarter results and saw its shares climb over 6% to new heights.
The technical foundation of this market boom lies in the transition to next-generation AI architectures. Earlier this month at CES in Las Vegas, Huang introduced the "Vera Rubin" platform, a revolutionary six-chip suite manufactured primarily using TSMC’s advanced 3-nanometer process. According to the Taipei Times, this new platform is 3.5 times more efficient at training AI models than its predecessor, Blackwell. The full-scale production of these chips has solidified the order books for Taiwanese manufacturers, including Hon Hai Precision Industry Co (Foxconn), which has emerged as the primary assembler for Rubin-based AI servers. This industrial synergy has created a "virtuous cycle" where hardware innovation directly translates into equity market appreciation.
From an analytical perspective, the TAIEX’s ascent to 32,000 points is not merely a speculative surge but a reflection of structural shifts in the global economy. The "AI trade" has evolved from a thematic investment into a fundamental driver of corporate earnings. While some analysts, such as those cited by Pepperstone Group, suggest the current rally may be a "relief rally" against valuation worries, the underlying data points to a massive capacity expansion by "hyperscalers" like Microsoft, Amazon, and Google. These tech giants are investing billions in AI data centers, effectively underwriting the revenue growth of Taiwanese chipmakers and component suppliers for the foreseeable future.
However, the sustainability of this record-high market faces potential headwinds. Investigative analysis reveals that Nvidia’s business has become increasingly concentrated, with four major customers accounting for 61% of its sales. Furthermore, physical bottlenecks—such as land availability, power grid stability, and the sheer speed of infrastructure deployment—could cap the rate at which demand translates into realized revenue through 2026. In Taiwan, these domestic constraints are compounded by geopolitical sensitivities. While U.S. President Trump has maintained a focus on domestic manufacturing and tariffs, the indispensable nature of Taiwan's 3nm and 2nm production capacity provides a unique, albeit delicate, shield for the local economy.
Looking ahead, the trajectory of the Taiwan stock market will likely depend on the successful commercialization of "inference" workloads—the phase where AI models are put to work in everyday applications. Nvidia’s recent $150 million investment in the startup Baseten signals a strategic pivot toward this segment. As AI moves from the laboratory to the enterprise level, the demand for specialized chips will diversify, potentially benefiting a wider array of Taiwanese mid-cap tech firms beyond the traditional heavyweights. For now, the "Huang effect" and the tangible production milestones at TSMC suggest that while the market may experience volatility, the fundamental boom in AI infrastructure is far from reaching its ceiling.
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