A fresh wave of Economic AI enthusiasm has electrified Taipei trading floors. Consequently, global funds executed their largest single-day purchase of Taiwan shares since 2005. The Bloomberg tally hit US$2.77 billion during the 25 February session. Meanwhile, the Taiwan Stock Exchange reported NT$41.30 billion of foreign institutional net Buying. Both figures underscored surging liquidity and intensifying overseas conviction in chip-centric portfolios. Market veterans attribute the frenzy to relentless demand for advanced semiconductors powering Economic AI workloads. TSMC, the exchange heavyweight, vaulted past NT$2,000 intraday and anchored the benchmark rally. Consequently, the Taiex closed at a record 35,413.07, adding more than 700 points. Turnover almost touched NT$1 trillion, reflecting frenzied retail and algorithmic participation. However, concentration risk and policy scrutiny now loom over the bull narrative. This article unpacks the flows, motivations, and future scenarios shaping Taiwan’s semiconductor-led surge.

Taiwan Capital Surge Record

Taiwan experienced an influx unseen in two decades on 25 February. Bloomberg data showed US$2.77 billion of Foreign cash entering local Stocks during one session. Additionally, exchange statistics revealed NT$41.30 billion of Buying by foreign institutional investors on the main board. Both datasets track slightly different investor universes, yet point to the same momentum. Turnover soared to NT$981.97 billion, the second highest in history. Consequently, liquidity conditions tightened and pushed the Taiwan dollar near four-month highs. Institutional desks reported unusually wide bid-ask spreads on several large futures contracts.

• Taiex close: 35,413.07 points, up 2.05%.
• TSMC weight: about 45% of benchmark.
• Six-day Foreign buying streak recorded.
• Yuanta ETF raised NT$170 billion earlier.

The magnitude of fresh capital highlights accelerating appetite for semiconductor exposure. However, disparate datasets complicate direct comparisons. Nevertheless, a single company remains the rally’s undisputed engine.

TSMC Drives Benchmark Rally

TSMC closed at NT$2,015 after breaching the psychologically important NT$2,000 mark intraday. Furthermore, its American Depositary Receipts had rallied overnight, priming algorithms for aggressive pre-market bids. Analyst Tom Tang noted that each 1% move in the chip giant can add roughly 0.4% to the Taiex. Moreover, TSMC alone represents near 45% of index weight, magnifying every price tick. Consequently, hedge funds track its ADR movements closely for cross-venue arbitrage signals. In contrast, secondary chip names saw milder gains despite upbeat guidance from global hyperscalers. Retail punters echoed the momentum through leveraged single-stock warrants.

TSMC’s dominance accelerates upside when sentiment is strong. However, the same dominance could amplify downside shocks. Understanding who supplies the fuel for such swings is therefore essential.

Foreign Inflows Data Explained

Bloomberg aggregates custodial settlement records across equity venues. Therefore, its US$2.77 billion figure covers broader offshore accounts than TWSE’s main board report. TWSE restricts the category to registered Foreign institutional investors trading listed Stocks. Meanwhile, retail flows appear under separate classifications, often via ETFs. Consequently, journalists must cite sources and definitions when comparing Buying volumes. Khoon Goh of ANZ added that limited hedging means currency support may persist. Subsequently, settlement data showed persistent allocations into technology heavyweights over defensive sectors.

• FINIs: Registered Foreign institutional investors.
• ADR: U.S. traded proxy for domestic shares.
• Taiex: Capitalization-weighted benchmark index.

Different data lenses still capture the same directional story. Foreign capital is leaning heavily toward Taiwanese semiconductors. But why does semiconductor demand remain so relentless?

Economic AI Demand Tailwind

Cloud providers are scaling data-center budgets to support complex Economic AI inference workloads. Moreover, each new generative model cycle requires advanced logic and packaging technologies dominated by the island foundries. UBP strategist Vey-Sern Ling called the island the home of the global AI supply chain. Consequently, hyperscaler purchase commitments offer multiyear revenue visibility for TSMC and peers. Economic AI ambitions also drive memory, packaging, and networking upgrades, broadening the beneficiary list. Furthermore, local ETFs facilitate quick retail participation in this secular narrative.

Structural chip demand sustains bullish forecasts. Nevertheless, concentration and policy risks cannot be ignored. The next section evaluates those hazards.

Concentration And Policy Risks

Heavy index weightings create asymmetric outcomes. If TSMC falters on yield issues, passive funds could trigger forced selling across the wider market. In contrast, runaway rallies risk attracting regulatory attention toward speculative margin activity. Moreover, the Financial Supervisory Commission already scrutinizes rapid ETF fundraising and marketing disclosures. Bloomberg sources suggest the central bank might tighten FX settlement windows for Foreign investors. Such measures could slow speculative Buying or encourage longer holding periods. Nevertheless, structural demand may counterbalance periodic tightening, according to several sell-side economists. Traders remain watchful of central bank liquidity sterilization operations overnight.

Market structure magnifies both gains and losses. Policy tweaks may modulate leverage but not core demand. Investors therefore need pragmatic playbooks.

Market Outlook And Strategy

Analysts expect continued earnings upgrades for leading chip designers through 2027. Consequently, many portfolio managers maintain overweight positions in local tech Stocks. However, they diversify through suppliers of advanced substrates, memory, and power management ICs. Traders also watch option skews on TSMC to hedge potential volatility bursts. Meanwhile, domestic ETF inflows remain a tactical sentiment gauge for short-term participants. Consequently, option volumes on index futures have climbed steadily this quarter.

• Monitor cross-border flow momentum daily.
• Track central bank comments on FX rules.
• Compare ADR and local price gaps.
• Limit position size relative to TSMC weight.

Disciplined monitoring mitigates concentration fallout. Still, skills development offers an additional edge. Professional education options have expanded.

Certification Path For Professionals

Investment professionals increasingly pair market expertise with technical accreditation. Consequently, knowledge of Economic AI infrastructures strengthens fundamental analysis. Professionals can enhance their expertise with the AI+ Everyone Essentials™ certification. The curriculum covers chip roadmaps, model economics, and governance frameworks relevant to capital allocators. Moreover, certified analysts often command higher credibility when discussing sensitive semiconductor forecasts. Economic AI fluency therefore complements traditional valuation skills and supports differentiated client advice. Graduates report improved communication when translating silicon roadmaps into portfolio theses.

Structured learning anchors analytical confidence. Furthermore, accreditation signals commitment to continuous improvement. The final section synthesizes key insights.

Taiwan’s February surge underscores how manufacturing dominance intersects with Economic AI spending cycles. Foreign funds chased this linkage, deploying record Buying and propelling Stocks to fresh highs. Consequently, liquidity and sentiment achieved a feedback loop amplified by the chip giant’s index heft. However, policy and concentration hazards remain live, especially if Economic AI forecasts moderate. Investors should track flow dashboards, FX rule changes, and valuation signals while diversifying exposures. Moreover, professionals can future-proof careers by mastering chip economics through curated certifications. These combined steps convert Economic AI volatility into sustainable opportunity. Nevertheless, disciplined risk frameworks stay paramount amid ever-shifting liquidity currents.