Only TSMC Is Profiting? Alex Lee Warns of “Polarization in Taiwan’s Stock Market” Becoming a National Security Issue: Nearly 1,200 Companies Fall Below Their Annual Moving Average

Taiwan’s stock market has performed strongly this year. Driven by the AI boom and heavyweight semiconductor stocks, the Taiex has repeatedly hit new highs. In this regard, Alex Lee pointed out that among Taiwan’s nearly 2,000 listed and OTC companies, the index has reached record highs, and Taiwan’s capital market now ranks eighth in the world by market capitalization—something almost unimaginable. Of course, much of this is due to TSMC and AI-related companies.

However, the other side of the reality mirrors the unfair divergence seen in global stock markets. Among Taiwan’s 2,000 companies, nearly 1,200 have fallen below their annual moving average, indicating extremely serious polarization.

Alex Lee explained on After-Work International Line that among these 1,200 companies, some suffer from structural problems, while many others still have significant room for improvement in adopting AI or communicating with investors.
“I don’t think it can be good for only TSMC,” he said. “I even believe this could become a national security issue. Everyone says Taiwan’s economy is doing very well, and GDP growth this year could reach 7–8%. But when you look at private consumption or ordinary people outside the high-tech sector, their lived experience isn’t the same—the days are not that easy.”

Alex Lee noted that in major Asian markets such as Japan and South Korea, the top 50 companies—whether by market value or trading volume—account for about 50% of total market turnover. In Taiwan’s case, the remaining 1,500 companies see steadily declining trading volume.
“Before talking about capital market performance, trading volume is extremely important,” he said. “How to attract more trading activity to smaller companies, or to those with weak stock prices but decent fundamentals, is a critical issue.”

According to Lee, exchanges and capital market regulators around the world are doing everything they can to introduce new stimulus measures to support underperforming companies whose value has not been fully recognized. For example, the Taiwan Stock Exchange has proposed multiple initiatives; the Tokyo Stock Exchange launched its “Value-Up” program three years ago; and China has incorporated market-value management into the KPIs of all listed companies.
“This shows that every capital market authority or exchange sees this as a serious problem—resource allocation is becoming increasingly uneven, and polarization is intensifying.”

Lee pointed out that high-performing companies may not need help, but many small companies face much higher costs when raising capital if their valuations or performance are weak. Every dollar they raise comes at a higher relative price compared to large, highly valued firms.
“The capital market exists to serve companies with vision that need capital. But if the moment a company enters the market its value is discounted, that is unfair and unhealthy for long-term economic development.”