The global AI arms race is providing a core catalyst for the Taiwan market; Ishares Core Msci Taiwan Index Etf (03074.HK) surged more than 1.7% intraday.

NewSpace — The global AI-infrastructure arms race is delivering a core tailwind to Taiwan, sending the TAIEX to a historic 28,000 intraday. As of 10:45 a.m. Ishares Core Msci Taiwan Index Etf (03074.HK) is up 1.75%, lifting its 12-month gain to 37.86%.

The ETF tracks the MSCI Taiwan 20/35 Capped Index, a one-ticket basket of 88 large- and mid-cap Taiwan stocks. A 10% buffer and 35% single-name cap curb concentration risk. Top holdings at end-September 2025: TSMC 33.7%, Hon Hai 6.4%, MediaTek 6.4%, Delta 2.4%, Fubon Financial 2.2%, etc.; the top ten account for ~60% of weight, giving pure-play exposure to Taiwan’s “semiconductor + electronics OEM + financials” complex.

Since listing the fund has kept annual tracking error within 50 bp and delivered ~30% over the past year, moving almost tick-for-tick with the index. AI servers, leading-edge nodes and CoWoS capacity expansion continue to lift TSMC’s earnings, pushing the benchmark to record highs and driving ETF volume.

Q4 25: TSMC posted gross/operating margins of 62%/54% and net profit of USD 16.1 bn, up 35% YoY on 20% revenue growth—beating across the board. Management now guides 2026 revenue +30% and lifts the long-term CAGR to 25% from 20%.

To meet demand, capex for the new fiscal year is raised to USD 52–56 bn, above the Street’s USD 49 bn. Post-earnings TSMC surged, and upstream equipment vendors TEL, Lam Research and ASML rallied in sympathy.

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