‘FOMO Really Got Me’: Taiwanese Go Deep Into Debt to Amp 100% Stock Rally

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This is a refrain often heard from bulls in Taipei.

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They point to the global dominance of Taiwan Semiconductor Manufacturing Co. and the large pack of companies behind it.  Together, they produce 90% of the world’s most advanced chips — crucial cogs in the cutting-edge technology that goes into smartphones, laptops, robotics and, most importantly, the massive AI data centers that are popping up across the globe.

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Of course, should that frenetic AI buildout suddenly slow at some point, as some on Wall Street suspect, then the demand for those chips will cool, too. 

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Moreover, the speculative mania sweeping Taiwan today is rapidly approaching the fevered pitch it reached during the dotcom days. Over the past 12 months, the amount of money investors borrowed from brokerages to finance stock purchases swelled 160%, leaving it near an all-time high set just before the 2000 crash. That surge in margin debt, as it is called, dwarfs the 50% increase recorded in the final 12 months of the bubble back then.  It even tops the 94% rise posted recently in Asia’s other AI powerhouse, South Korea, a country where the government has worked relentlessly to fan stock-investing fever and drive the market higher.

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For many Taiwanese, it’s their first time borrowing money to amp their bets.“FOMO really got me,” Ada Hung said. Hung, 39, is part of the rapidly expanding community of social-media influencers who dole out stock tips in Taipei. Posting under the handle Banini, she’s up to nearly half a million followers.For years, she had refused to go into debt to goose returns but as she watched the market spike higher, day after day, and saw friends raking in far more than she was, she gave in to temptation and took out a NT$5 million ($158,302) loan in May. Better “to chase the opportunity,” she figured, “than let it slip away.” 

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Sevenfold Surge

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Investor demand for loans has been so torrid that Taiwanese brokers have themselves embarked on a borrowing spree to shore up working capital. They’ve issued nearly $1.2 billion of bonds this year, more than seven times the amount raised in all of 2025, data compiled by Bloomberg show. 

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Some of them are also turning to unconventional fundraising sources, like the syndicated loan market, where the pace of deals has been unprecedented this year, according to data compiled by Bloomberg.

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Nascent signs of trouble are emerging, even as the stock market continues to push higher. Investor defaults stemming from stock trades, for instance, have more than doubled in June to over NT$2 billion, the highest monthly total recorded since data were first released in 2019.

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To Wu, the economics professor, it’s clear that authorities need to take concrete steps to rein in the frenzy and avoid a crash later on. “Taiwan’s government should step in to cool the market,” he says.

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Stress Tests

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Contacted by Bloomberg News for comment, a unit of the Financial Supervisory Commission that oversees brokerages said it was closely monitoring the market for risks but that leverage in the industry remains in check so far.

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The unit, the Securities and Futures Bureau, said in a statement that none of the 34 brokerages that are active in various forms of leverage financing had breached regulatory limits as of May. Moreover, the bureau said those defaults in the stock market remain less than 0.002% of all transactions.

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“We will continue to monitor securities firms’ business conditions and risk-control measures,” the regulator said, noting that some have already started taking action by cutting leverage ratios, suspending on-line loan applications and adjusting interest rates.