AI Stock Frenzy Spurs $50 Billion ETF Boom in Taiwan

From early morning to late night, growing numbers of Taiwanese find themselves glued to YouTube videos, Facebook groups or online forums offering tips about exchange-traded stock funds. With much—in some cases all—of their savings sitting in ETFs tracking Taiwanese equities, they’re terrified of missing an opportunity to reap what they’re convinced will be fat profits. “Everyone’s talking about ETFs,” says Annie, a former administrative assistant in Taipei who has plowed her entire NT$3 million ($93,000) retirement account into the funds (and asked to use only her English-language name to protect her privacy). “My children told me this was stupid, but now they’ve all invested too.”

Surging interest in artificial intelligence stocks has triggered an unprecedented investment boom in Taiwan. The local benchmark stock index has risen 30% in the past year, propelled by a 55% gain for Taiwan Semiconductor Manufacturing Co., the world’s leading chipmaker and the No. 1 supplier to Nvidia Corp. Taiwanese now hold more than $50 billion in ETFs tracking local stocks—up more than 80% from a year ago and 12 times the 2019 level. Including bond funds and those that focus on overseas stocks, total ETF holdings rise to $130 billion.