Taiwan’s AI stock boom is creating more ways for investors to profit from its chip supply chain, making early-stage startups a tougher pitch.

Taiwan’s benchmark Taiex index is up more than 50% this year, making it the world’s best-performing major index after pulling ahead of South Korea’s Kospi.

The gains extend well beyond Taiwan Semiconductor Manufacturing Co., spanning chip design, advanced packaging, networking, and server companies.

About 7% of Taiwan-listed stocks have doubled this year, compared with 3% in South Korea.

That wider exposure has made Taiwan a preferred Asian AI trade.

A September Bank of America survey found that 35% of fund managers expected Taiwan to benefit most from the next phase of the AI cycle, tying it with the US.

Just 5% chose South Korea.

For startups, the appeal of those public-market returns can reshape the funding calculation.

For Anderson Chen, the founder and CEO of Operon Solutions, a Y Combinator-backed industrial AI startup, that calculus was part of what shaped how he raised money.

Chen said he chose to raise Operon’s $700,000 pre-seed primarily from Silicon Valley investors, leaving room for Taiwanese friends and family to participate.

“The market in semiconductors is just too good, and you can get 10X returns from the stock market,” Chen told Business Insider.

In his view, even a successful startup IPO might generate only a two- or threefold return for investors.

That creates a challenge for startups trying to build Taiwan’s next generation of winners.