TWSE Market Insights

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In the face of the international geopolitical wave of “de-risking,” Chan Wen-nan, President of the Digital Transformation Institute, who has long observed Taiwan’s industrial development trends, suggests that Taiwan can no longer rely on its singular manufacturing capability to secure strategic guarantees. Instead, the national strategy should be upgraded from a “Manufacturing Center” to a hub for “Technology and System Integration.”

Against this backdrop, Asia Innovation Capital – jointly established by the Financial Supervisory Commission, the Taiwan Stock Exchange, and the Taipei Exchange – has, according to Chan Wen-nan’s observation, a value that extends far beyond simply injecting fresh capital into the market. It can also amplify industrial added value, serve as a key engine driving Taiwan’s industry-wide integration, and help cultivate the next wave for more “magic mountain ranges that protect the nation.”

The core mission of Asia Innovation Capital is to create a Nasdaq of Asia market board in Taiwan. Chan Wen-nan believes that beyond its primary mission of “capital raising,” the platform can actually play a vital role in industrial transformation, further expanding its added value. This can be manifested in the following three aspects.

First, following the previous proposal by the U.S. Secretary of Commerce for a “50-50 split” in U.S.–Taiwan chip production, Chan Wen-nan believes that Taiwan cannot rely solely on a single “silicon shield” as its strategic barrier. In other words, the current focus on “heavy manufacturing, light solutions” must be adjusted, shifting manufacturing toward an integrated development of technology and solutions, thereby creating new leverage for Taiwan. With the establishment of Asia Innovation Capital, coupled with the continuous refinement of Taiwan Innovation Board’s listing and trading mechanisms, the allowance of day trading, and the enhancement of Taiwan Innovation Board’s scale and liquidity, more enterprises with niche technologies will have the opportunity to enter the capital market.

Secondly, Asia Innovation Capital can serve as a “software-hardware integration” and “big leading small” innovation engine. Chan Wen-nan pointed out that there are several market-leading electronic hardware manufacturers in Taiwan. Asia Innovation Capital can further promote collaboration between such tech companies and startups. For example, through a “big leading small” model, when a startup’s technology gains recognition from large companies, it can leverage these companies’ business networks to enter the global supply chains of major customers, giving the startup’s technological solutions and services greater opportunities to be implemented worldwide.

Chan Wen-nan believes that the third added value lies in accelerating the AI transformation and digital implementation for small and medium-sized enterprises. He observes that most small and medium-sized enterprises in Taiwan are still at the “digitalization” stage. Coupled with the government’s active promotion of “AI for all Trades and Professions,” as more enterprises list on the Taiwan Innovation Board and launch solutions akin to AI as a Service, resource-constrained small and medium-sized enterprises can adopt AI solutions with lower barriers and without high costs, while simultaneously generating tangible revenue for startups. “This model creates a win-win situation for startups and small and medium-sized enterprises while simultaneously driving the industry toward AI transformation,” Chan Wen-nan added.

However, for innovative management teams eager to enter the capital market, President Chan Wen-nan also warned against treating fundraising as the sole means and listing as the only goal. Chan Wen-nan offered several considerations for company founders. First, they should establish a global market goal. Taiwan can serve as a “Field Try” and a proving ground for developing a “Best practice,” but he also recommends that startups, especially in their early stages, aim for the global market. Fundraising strategies can likewise be planned from a global perspective to ensure that their products gain traction in international markets.

The second is to improve transparency and corporate governance capabilities. After going public, investors will pay close attention to corporate governance and profitability. To enhance liquidity, startups must strengthen their corporate transparency. Therefore, President Chan Wen-nan emphasized that companies should never pursue an IPO just for the sake of IPO. Instead, they need a comprehensive plan and should proceed step by step according to their goals, and the capital market will provide corresponding rewards. He also recommended that Asia Innovation Capital offer “governance guidance” to pre-IPO companies, rather than merely “procedural support,” helping startups implement stronger management systems.

Following the establishment of Asia Innovation Capital, several initiatives will be introduced, including reforms to the trading system of the Taiwan Innovation Board, relaxed TWSE/TPEx listing requirements for foreign companies, greater flexibility in board transfers, and measures to encourage public participation. Building on this foundation, Chan Wen-nan shared three strategic recommendations, hoping that Asia Innovation Capital will continue to grow and thrive. 

The first is to strengthen the disclosure of non-traditional information to enhance market liquidity. Chan Wen-nan observed that many companies on the Taiwan Innovation Board are still in the early stages of development, and traditional financial reporting is often insufficient, which can reduce investors’ willingness to participate. To enhance liquidity, he suggested that regulatory authorities require companies to disclose more substantive indicators reflecting growth, such as user data, R&D progress, commercial milestones, or patent achievements. By reducing information asymmetry, trading volume can be revitalized.

The second recommendation is to establish a research report system to deepen industry insights. Since research reports on companies on Taiwan Innovation Board are still scarce, stock prices often fail to reflect fundamentals, which reduces institutional investors’ willingness to participate. Chan Wen-nan believes that, through incentives, research subsidies, or access to database resources, Asia Innovation Capital could invite investment trusts, securities firms, or research institutions to establish dedicated teams that can provide investors with regular research reports containing industry insights for reference.

The third direction is to promote institutional internationalization and attract multinational innovative companies to list in Taiwan. Chan Wen-nan stated, “Asia Innovation Capital is not only intended to encourage Taiwanese companies to list locally, but also to attract international innovative companies to come in.” In addition to continued regulatory liberalization, the system and processes also need to be internationalized. He gave examples such as implementing complete English for cross-border filing documents and procedures, establishing predictable review processes, and ensuring transparency in the tax system, allowing Taiwan to maintain its competitive edge in the global capital market.

Regarding the ultimate aspiration for Asia Innovation Capital, Chan Wen-nan believes its value can shift from being “fundraising-oriented” to “brand-oriented.” On one hand, this allows the world to recognize that Taiwan has leading solutions beyond semiconductors, thereby building global trust in Taiwan’s industries. On the other hand, it can strengthen storytelling capabilities, enabling companies on the board to help drive a dual-axis transformation in AI and ESG globally, and in turn, establish a fresh national image. Through these efforts, it is believed that Taiwan will continue to “build mountains,” ensuring that the next wave of magic mountain ranges that protect the nation grows and thrives like bamboo shoots in spring.