Why the head of Taiwan’s stock exchange wants you to look past TSMC—and embrace the ‘technology island’

The world’s largest chipmaker, Taiwan Semiconductor Manufacturing Company, released quarterly results that almost any company would envy: a 40% jump in revenue to $40.2 billion, and a 77% jump in profit to $22.3 billion. Investors, though, decided those gaudy numbers weren’t enough. The next day, TSMC shares dropped 7.3%—and dragged Taiwan’s benchmark TAIEX index down in the biggest single-day point decline on record.

TSMC’s outsize role poses a challenge for Sherman Lin, the chair of the Taiwan Stock Exchange Corporation, which runs the island’s main stock exchange. According to Bloomberg calculations, Taiwan overtook India to become the world’s fifth-largest stock market—behind only the U.S., mainland China, Japan, and Hong Kong—in May. And yet two-fifths of that value comes from TSMC. 

That’s why Lin and his colleagues at the stock exchange are trying to make sure that investors, domestic and foreign, give all of Taiwan’s other companies a close look too. 

“The best way to understand Taiwan is as a technology island,” he says. “We’re like an industrial park. Companies can have fast and agile collaborations among the supply chain.” He rattles off the cities along the corridor that runs from Taipei down through Taoyuan, Hsinchu, Taichung and Kaohsiung with manufacturers all within a few hours’ drive of each other. “Technology really is in our DNA,” he adds.

Taiwan’s pitch contrasts to other equity markets in the region: Hong Kong, for example, is a gateway into mainland China; Singapore is trying to position itself as a home for Southeast Asian companies. Lin, however, is focused on technology. 

“When global investors invest in Taiwan, they are not simply investing in one company,” he says. “They are investing in the value created by an entire AI ecosystem and supply chain.” 

TSMC, ‘Taiwan’s most iconic company’

It’s impossible to talk about Taiwan’s stock market and not mention Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading producer of advanced chips and supplier to companies like Apple and Nvidia. The company is worth close to $2 trillion, making........

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