Stories
Taiwan Dethrones South Korea as Asia's Ultimate AI Winner Amid Market Shift
C
CNBC TV18•07-10-2026, 06:31
Taiwan Dethrones South Korea as Asia's Ultimate AI Winner Amid Market Shift
- •Taiwan's benchmark Taiex outperformed South Korea's KOSPI by 23 percentage points between the July-September period, marking the biggest margin since the turn of the century.
- •Bank of America fund manager survey shows nearly 40% are overweight on Taiwan compared to 25% for South Korea, with Taiwan viewed as the next big AI cycle beneficiary.
- •Taiwan benefits from a broader presence across the entire AI supply chain, including chip design, manufacturing, packaging, networking, and servers.
- •South Korea's market is heavily concentrated in Samsung Electronics and SK Hynix, which faced a sharp correction of up to 33% during the September quarter.
- •Taiwan's Taiex has become the world's best performing stock market this year with a 72% return, driven by volume-based earnings and deeper market opportunities.
Key Questions Answered
Taiwan's market dethroned South Korea from the top spot as the biggest winner of the AI trade in Asia.
Taiwan's optimism is driven by a broader presence across the entire AI supply chain—including chip design, manufacturing, packaging, networking, and servers—alongside stickier, volume-based earnings.
Taiwan's Taiex currently trades at 18 times its one-year forward estimated earnings, whereas South Korea's KOSPI trades at only 5.5 times, reflecting the ongoing "Korea discount".
