Taiwan's Taiex index may hit 35,000 in 2026, fueled by AI growth

Taiwan’s Taiex stock index could approach 35,000 points in 2026, according to forecasts from several major advisory firms.

President Capital Management offered the highest estimate at 35,000, expecting AI-related stocks to continue driving growth.

The index closed at 27,980.89 on December 5, up 21% this year and 61% above its April 9 low.

Capital Investment Management expects the index to challenge 34,000 next year, citing the dominance of TSMC, Hon Hai (Foxconn), Delta Electronics, MediaTek, and Quanta Computer.

Other forecasts for 2026 range from 31,000 to 34,000 points, with analysts pointing to sustained AI momentum, market liquidity, and potential US rate cuts as key factors.

🔗 Source: Focus Taiwan

🧠 Food for thought

Implications, context, and why it matters.

Ambitious targets overlook CoWoS utilization uncertainties and China risks

Taiex targets of 34,000–35,000 need strong earnings. TSMC (Taiwan Semiconductor Manufacturing Co.) Chip-on-Wafer-on-Substrate (CoWoS) advanced packaging for AI chips runs at about 60% utilization (the share of installed capacity used) 1.
China’s foundry share could pass Taiwan by 2029, driven by subsidies and mature‑node capacity, moving from Taiwan 35% to China 37% 2. Nvidia, a leading AI chip designer, has stopped taking orders from Chinese customers since August 2024 amid expected H20 export controls 3.
Taiwan’s market price‑to‑earnings ratio was 23.3 in December 2025 4, above its 5‑year average range of 13.7–18.2 5. Forecasted index gains of 11–25% may overshoot if AI momentum cools or margins come under pressure.

Equipment and materials suppliers can capitalize on 2026 CoWoS and 3nm buildouts

IDC sees TSMC lifting CoWoS capacity by over 66% to 1.1 million wafers in 2026 from 660,000 in 2025, while Morgan Stanley expects a 20,000‑wafer‑per‑month boost in 3‑nanometer (3nm) front‑end capacity 2 6. Vendors such as AllRing (an osmium materials supplier) and ASMPT (a semiconductor packaging equipment maker focused on thermal compression bonding) can ride the AP8 P1/P2 ramp 6.
Powertech, a semiconductor packaging and testing provider, will double capex to NT$40 billion in 2026 to expand PiFO packaging, a CoWoS‑L alternative with about 30% lower costs 7. It has large orders from several U.S. AI chipmakers and sees strength through 2027 7. That opens doors for substrate, redistribution layer (RDL), and glass substrate suppliers 7.
TSMC plans CoWoS production at its Arizona fabrication facility (fab) in 2029 8. Amkor is expanding Embedded Multi‑die Interconnect Bridge (EMIB) capacity with Intel in South Korea, Portugal, and the US 8.