Stories
Taiwan Dethrones Korea Atop Global Markets As AI Trade Widens
- •The Taiex Index outperformed the Kospi by approximately 23 percentage points last quarter, marking the widest margin since the turn of the century.
- •Taiwan benefits from deeper linkages across the AI supply chain, spanning chip design, manufacturing, packaging, networking, and servers.
- •About 40% of fund managers surveyed by Bank of America were overweight Taiwan, compared to 25% for Korea.
- •Korea remains heavily concentrated in memory chipmakers Samsung Electronics and SK Hynix, leaving it vulnerable to potential shifts in the memory cycle.
- •Taiwan's benchmark index is up 72% in 2026, currently ranking as the top performer among more than 90 equity indexes tracked by Bloomberg.
Key Questions Answered
Taiwan offers broader and deeper exposure across the AI supply chain—including chip design, manufacturing, packaging, networking, and servers—resulting in stickier volume-driven earnings upgrades. In contrast, South Korea's market remains heavily concentrated in memory chipmakers like Samsung and SK Hynix, whose recent earnings have been driven more by volatile prices.
Up 72% in 2026, Taiwan's benchmark Taiex Index is the top performer among more than 90 equity indexes tracked by Bloomberg. South Korea's Kospi is ranked second with gains of about 65% after trading places at the top of the global leaderboard throughout the year.
The Taiex trades at about 18 times its one-year forward estimated earnings. Meanwhile, the Kospi trades around 5.5 times, reflecting concerns that the memory cycle may be nearing a peak and the longstanding discount that keeps the market cheap relative to global peers.
