South Korea, Taiwan Stocks Hit Records as AI Winners Drive 40%-Plus Index Concentration
Updated
Updated · CNBC · May 12
South Korea, Taiwan Stocks Hit Records as AI Winners Drive 40%-Plus Index Concentration
9 articles · Updated · CNBC · May 12
Kospi has jumped more than 80% this year and Taiex has repeatedly set records, but the rally is increasingly concentrated in a few AI-linked chip names rather than broad domestic growth.
TSMC now makes up more than 40% of Taiwan's benchmark, while Samsung Electronics and SK Hynix reached a record 42.2% of the Kospi in May as investors chased AI hardware demand.
Goldman estimates South Korean earnings growth could surge 300% this year, yet strategists warn both markets are highly exposed to any slowdown in data-center spending, supply-chain disruption or geopolitical shock.
Oil is another pressure point: Taiwan and South Korea are major energy importers, so higher crude prices tied to the Iran conflict could hurt purchasing power and competitiveness even as chip exports boom.
Taiwan looks more vulnerable because its market is increasingly tied to TSMC, while Korea's rally has spread into shipbuilding, defense, power equipment and K-culture stocks, making it somewhat broader.
Taiwan and South Korea's economies are soaring on AI, but are they becoming too big to fail for the world?
While markets cheer AI dominance, are nations like Taiwan risking a future 'expertise crisis' by outsourcing their thinking?
As Middle East conflicts threaten helium supplies, how long can the AI chip boom last before hitting a material wall?
Asia’s $1 Trillion AI Chip Boom: Taiwan and South Korea’s Market Surge, Risks, and Global Impact in 2026
Overview
In May 2026, Asian markets show a striking duality, with Taiwan and South Korea’s stock markets reaching record highs. This growth is fueled by soaring global demand for semiconductors and the rapid expansion of the Artificial Intelligence sector, placing Asia at the center of the world economy. Despite ongoing concerns over tariffs and geopolitical tensions, especially events like the Iran war, Taiwan’s TAIEX has posted strong annual gains for three years, and South Korea’s market is also surging. The semiconductor and AI boom is the main driver behind this unprecedented market performance, highlighting both opportunity and risk in the region.