The AI boom has made Taiwan a global market heavyweight, but extreme dependence on TSMC and foreign capital leaves the TAIEX unusually vulnerable to sudden shocks

• By Nigel P. Daly
  / Contributing reporter

On July 16, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) reported second-quarter revenue of US$40.2 billion and a gross margin of 67.7 percent, supported by global demand for AI chips. The following day, the TAIEX (台股加權指數) recorded its largest-ever single-day point decline.

The Index fell…