- Taiwan’s stock market has surged as investors pile into companies powering the global AI buildout.
- The rally is giving local investors a liquid alternative to early-stage startup bets.
- For early-stage founders, that can mean looking abroad for capital.
Taiwans benchmark Taiex index is up more than 50% this year, making it the worlds best-performing major index after pulling ahead of South Koreas Kospi
The gains extend well beyond Taiwan Semiconductor Manufacturing Co., spanning chip design, advanced packaging, networking, and server companies. About 7% of Taiwan-listed stocks have doubled this year, compared with 3% in South Korea
That wider exposure has made Taiwan a preferred Asian AI trade
A September Bank of America survey found that 35% of fund managers expected Taiwan to benefit most from the next phase of the AI cycle, tying it with the US. Just 5% chose South Korea
For startups, the appeal of those public-market returns can reshape the funding calculation
For Anderson Chen, the founder and CEO of Operon Solutions, a Y Combinator-backed industrial AI startup, that calculus was part of what shaped how he raised money
Chen said he chose to raise Operons $700,000 pre-seed primarily from Silicon Valley investors, leaving room for Taiwanese friends and family to participate
The market in semiconductors is just too good, and you can get 10X returns from the stock market, Chen told Business Insider
In his view, even a successful startup IPO might generate only a two- or threefold return for investors
That creates a challenge for startups trying to build Taiwans next generation of winners
Caleb Chu, an early-stage investor and founder of Taiwan-based Nova Studio, which backs young founders, told Business Insider that the stock rally had drawn many Taiwanese investors toward listed shares and away from venture capital and startups
Findit, a government-commissioned platform that tracks Taiwan’s startup ecosystem, found that seed and angel rounds made up 38.4% of investment deals by Taiwanese VC firms in 2021. By 2024, their share had fallen to 17.1%
Chu said Taiwanese investors had increasingly favored B- and C-round and pre-IPO companies, where the route to returns was clearer
Private-equity funds face a related, though not identical, pressure. A March report by KPMG Taiwan said had created a crowding-out effect for private funds, as investors favored liquid public AI stocks over funds with longer lockups and less certain exits
US venture data shows a different, if still uneven, mix
PitchBook and the National Venture Capital Association said early-stage dealmaking was more favorable for AI startups than for non-AI peers in the first quarter of 2026. In a separate report, they found that 87.5% of US venture dollars invested in the first half went to rounds of $100 million or more
When you look at the statistics around the world, the world is leaning toward early stage because investors realize it can generate much higher returns. Taiwan is the opposite, Chu said
For founders, that can mean looking abroad for early backing
Operon’s Chen said fundraising had become easier overall for Taiwanese deep-tech startups seeking overseas capital, helped by and semiconductor expertise
His startup’s $700,000 pre-seed round closed within three days
It’s gotten easier to fundraise in general, but maybe not necessarily in Taiwan, he said