Taiwan Stocks Break 45,000 Points; CIER Warns of Correction Risks

Driven by an explosion in AI-related themes, the Taiwan stock market has surged, breaking through the 45,000-point mark. With concerns over market overheating, Lien Hsien-ming, President of the Chung-Hua Institution for Economic Research (CIER), stated that while it is difficult to judge if the market is currently overheated, a correction is inevitable, and the magnitude of such a correction 'is expected to be larger than everyone imagines.' Less than halfway through 2026, Taiwan stocks have soared past the 30,000 and 40,000-point marks, and in May, their market capitalization officially surpassed India's, making them the 5th largest in the world. The upcoming Taipei International Computer Show (COMPUTEX) and TSMC's shareholders' meeting on June 4 continue to fuel the AI theme. Taiwan stocks opened high today, rising nearly 1,200 points during the session to reach a record high of 45,931 points, closing at 45,337.91 points, another record high. Lien noted that strong demand for AI supports export performance, and the economic boom is expected to continue until the end of the year. Chien Chin-han, a researcher at the Institute of Economics, Academia Sinica, said that AI hardware demand is exceeding expectations, reflecting in the upward revision of the annual economic growth forecast to 9.64% by the DGBAS. Private consumption growth is also at a very high level of 3.6%. Chien estimated that since January 2023, Taiwan stocks have created 107 trillion NTD in paper wealth, which boosts consumer confidence and stimulates consumption.