Taiwanese borrow to buy stocks in AI-fuelled frenzy

Taiwan's stock market experienced a rapid growth in 2026, soaring by 59 percent in the first half of the year, driven by strong demand for AI hardware produced by chipmaker TSMC and other companies. Real estate worker Lucas Chen borrowed NT$5 million to invest in tech shares, and within six months, his holdings quadrupled. Chen is among many individuals utilizing debt to purchase stocks in Taiwan's market, which reached all-time highs due to tech firms increasing investments in AI infrastructure.

However, the boom in stock purchases has led to some investors incurring significant losses or falling prey to scams, prompting authorities to caution about the associated risks. Financial influencer Yeh Yu-shuo has benefited from the market but has also witnessed the negative impacts, as some members of his Facebook trading group have expressed suicidal thoughts due to their losses.

Anticipation of a potential U.S. interest rate increase has contributed to market volatility, potentially reducing demand for stocks, including tech companies reliant on borrowing for expansion. Young investors in Taiwan are increasingly leveraging their savings or bank loans to buy stocks, with financial institutions willing to extend credit due to the country's high levels of deposit reserves.

While authorities maintain that credit risks remain under control, social media platforms in Taiwan are flooded with posts about investors making substantial profits, often without highlighting the associated risks, creating a perception of widespread success. Despite the market corrections observed in other markets, such as South Korea's 40 percent drop, many investors, including Chen, maintain faith in Taiwan's stock market, attributing it to the stability of TSMC.