*J.P. Morgan Asia FTM 15 May 26 Stay with TW’s AI buildout momentum; Init EM ESS producer Deye-A at OW; Transition Talks: EU's Electric Ambition; Asia Insurance Forum takeaways; Init SK Inno at OW; SIA solid beat

Research evidence excerpt

*J.P. Morgan Asia FTM 15 May 26 Stay with TW’s AI buildout momentum; Init EM ESS producer Deye-A at OW; Transition Talks: EU's Electric Ambition; Asia Insurance Forum takeaways; Init SK Inno at OW; SIA solid beat

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Asia First to Market 15 May 2026

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Taiwan Equity Strategy, Taiwan (Mixo Das)

Staying with the momentum in the most pure-play exposure to AI buildout

As perhaps the most pure-play exposure to the global AI buildout, the Taiwan market has grown in

magnitude and importance in recent years. Total market cap has increased from US$1.5tn in late 2022 to

nearly US$5tn now (fourth largest in the world). Taiwan’s weight in the MSCI EM index is now the largest -

surpassing China’s last month. And TSMC is the seventh-largest stock in the MSCI World index - attracting

global attention. As we highlighted across the region last month, following the easing of AI monetization

concerns YTD and the shift in global macro conditions resulting from the Iran conflict, we recommend

staying with the momentum in the AI hardware space (embracing the inherent concentration risks). As such,

we raise our TWSE index base/bull/bear case targets to 47,000/50,000/40,000 and we remain OW Taiwan.

Top picks in the market include TSMC, Unimicron, Wiwynn, Alchip, Hon. Precision, CTBC. Across meetings

in the US, HK and Singapore over the past three weeks, we found investors on aggregate to be cautiously

optimistic but less-than-fully positioned in the market.