Why One Stock Moves Taiwan's Market: TSMC and the TAIEX

Taiwan’s main index follows Taiwan Semiconductor Manufacturing Co. (TSMC) because of how it is built. The TAIEX weighs each stock by its full market value, and TSMC is by far the largest company on the Taiwan Stock Exchange (TWSE). On September 30, 2026 it made up 41.12% of the index, according to the Taiwan Futures Exchange (TAIFEX). The next-largest stock, MediaTek, was 5.05%. So when TSMC moves 1%, the index moves about 0.4% from TSMC alone, before any other stock counts.

Index levels below are TAIEX closes (Taiwan Stock Exchange). Share prices are Taiwan Stock Exchange closing prices in New Taiwan dollars (NT$).

How is the TAIEX built?

The TAIEX, short for Taiwan Stock Exchange Capitalization Weighted Stock Index, is compiled by the TWSE. Its methodology sets out the main rules:

• Members: all common stocks listed on the TWSE. A newly listed company joins from the first trading day of the month after one full calendar month of trading. Suspended stocks and full-delivery stocks drop out.
• Weighting: the index adds up each member’s trade price times its number of issued shares. It uses all issued shares, not only the shares that trade freely.
• Formula: index = aggregate market value ÷ base value × 100. The base is the 1966 annual average, set at 100. The TWSE lists the launch date as November 1970.
• Continuity: the base value is adjusted for events such as members joining or leaving and new share issues, so those changes do not move the index.
• Dividends: the price index is not adjusted for cash dividends. The TWSE also publishes a total return version that is.
• Timing: the index is calculated every five seconds during trading hours, and a closing value once a day after the close. The regular session runs 09:00 to 13:30 Taipei time.

Taiwan Index Plus Corporation handles member changes and index maintenance for the TWSE. The TAIFEX list for September 30 had 1,071 members.

How big is TSMC in the TAIEX?

TAIFEX publishes each member’s share of the index’s market value. The table is updated once at the end of each month and is marked for reference only. On September 30, 2026:

Rank	Stock	Code	Share of TAIEX market value
1	TSMC	2330	41.12%
2	MediaTek	2454	5.05%
5	ASE Technology Holding	3711	2.01%
8	United Microelectronics Corp. (UMC)	2303	1.24%
—	Ranks 2 to 11 combined		19.75%
—	Top 10 combined		59.83%

TSMC alone was more than twice the next ten stocks put together. The other 1,070 members shared the remaining 58.88%.

The weight is not fixed. It changes every day as TSMC’s price moves against the rest of the market, which is why the date matters. Because the TAIEX uses all issued shares, a stock’s index weight is the same as its share of the members’ total market value.

What does a 41% weight do to the index’s daily move?

The arithmetic of a weighted index is simple. A stock with weight w that moves x% adds about w × x percentage points to the index’s move, holding everything else still. At 41.12%:

• TSMC +1%, every other stock flat: TAIEX about +0.41%.
• TSMC +10%, every other stock flat: TAIEX about +4.1%. Ten percent is the most a TWSE stock can move in a day, measured from the opening auction reference price, according to the exchange. Our explainer on Taiwan’s daily price limit covers that rule.

Two October days show the split. The September 30 weight applies to the next day’s move.

October 1. The TAIEX rose from 47,940.13 to 48,353.49, +0.86%. TSMC rose from NT$2,480 to NT$2,510, +1.21%. At 41.12%, TSMC contributed about 0.50 percentage point. The other 58.88% of the index added about 0.37 point, an average gain of about 0.6% for the rest.

October 15. The TAIEX fell from 48,625.83 to 46,969.87, −3.41%. TSMC fell from NT$2,490 to NT$2,440, −2.01%. With a weight near 41%, TSMC took about 0.8 point off the index. The other stocks, together about 59%, accounted for the other 2.6 points, an average fall of about 4.4%. On that day the rest of the market fell harder than TSMC did.

So “TSMC moves the TAIEX” is true in a precise sense: the index’s daily move is about four-tenths of TSMC’s move plus about six-tenths of the average move of everything else. The second part can push the same way or the other way.

How often did TSMC and the TAIEX move together in 2026?

The figures below use 128 daily moves, from the close on April 14 to the close on October 19, 2026.

• TSMC and the TAIEX closed in the same direction on 97 days, in opposite directions on 22 days, and TSMC was unchanged on 9 days.
• The TAIEX moved 2% or more on 25 days. TSMC moved the same way on all 25.
• The TAIEX moved 3% or more on 13 days. TSMC moved further than the index on 4 of them.
• The average daily move, up or down, was 1.34% for the TAIEX and 1.48% for TSMC.

The opposite-direction days were small ones. The largest TAIEX move among them was +1.34% on July 22, when TSMC fell 0.41%.

The largest days in the span:

Date	TAIEX	TSMC (2330)	MediaTek (2454)	UMC (2303)
Jul 17	−6.47%	−7.29%	−8.92%	−10.00%
Jul 31	+7.98%	+9.98%	+9.89%	+10.00%

On July 31 the TAIEX rose from 39,933.30 to 43,119.75, and TSMC from NT$2,205 to NT$2,425. On July 17 the index fell from 45,624.98 to 42,671.27, and TSMC from NT$2,470 to NT$2,290. On both days MediaTek moved nearly as much as TSMC or more, and UMC moved exactly 10%.

Two other chip stocks for comparison: MediaTek closed in the same direction as the TAIEX on 93 of the 128 days, and UMC on 90.

Does the TAIEX simply track TSMC, then?

Not over longer stretches. From April 14 to October 19, 2026:

• The TAIEX rose +29.00%, from 36,296.12 to 46,822.08.
• TSMC rose +17.76%, from NT$2,055 to NT$2,420.
• MediaTek rose +144.5%, from NT$1,720 to NT$4,205.
• UMC rose +120.3%, from NT$59.70 to NT$131.50.

These are price changes and leave out dividends, as the price index does. The index rose more than TSMC, which means the other stocks, as a group, rose more. A 41% weight sets how much of each day’s move comes from TSMC. It does not make the index a copy of TSMC.

How does this compare with Korea?

Korea’s KOSPI has a similar pattern with two companies instead of one. Our explainer on why the KOSPI is so volatile finds that Samsung Electronics and SK hynix came to about 48% of the KOSPI’s market value on October 13, 2026.

The two indexes swung by different amounts. Over the same April 14 to October 19 span, using each market’s own trading days:

Index	Daily moves	Moves of 3% or more	Average daily move
TAIEX (Taiwan Stock Exchange)	128	13	1.34%
KOSPI (Korea Exchange)	124	46	2.87%

What does the weight mean for funds in Taiwan?

Taiwan’s fund rules normally cap a fund’s holding in one company at 10% of its net asset value, according to the Financial Supervisory Commission (FSC). An FSC order dated April 24, 2026 relaxed that for one case. Domestic equity funds that invest only in Taiwan stocks, and active exchange-traded funds of that kind, may hold a listed stock that is more than 10% of the TAIEX, subject to two limits:

• the holding may not exceed that stock’s weight in the TAIEX;
• the stock plus the company’s corporate or financial bonds may not exceed 25% of the fund’s net asset value.

The FSC said the change reflects the rising share of a few large listed companies in the market’s total value. Its release names no company. On the September 30 TAIFEX table, TSMC was the only stock above 10%.

Where can I watch this day to day?

The Taiwan chip map sizes TSMC, MediaTek, UMC, ASE and other Taiwan chip stocks by market value and colors them by the day’s move, so TSMC’s weight is visible at a glance. TSMC also trades in New York as an American depositary share; our explainer on TSM vs 2330 shows how to compare the two prices.