Asia's AI chip boom triples Korea's Kospi, doubles Taiwan's Taiex

The global AI build-out has transformed Asia's chip-making corridor into a wealth-creation machine, with South Korea's Kospi tripling and Taiwan's Taiex doubling over the past 18 months as trillions of dollars flow into semiconductor supply chains.

"Everyone should be very happy about the stock prices, because you can buy the stock more cheaply," Nvidia Chief Executive Jensen Huang said in Seoul last week after South Korea's main index halted trading following an 8% drop.

The four largest hyperscalers — Microsoft, Meta Platforms, Amazon and Alphabet's Google — plan to spend as much as $670 billion this year on AI-related capital expenditures, a sum exceeding the inflation-adjusted cost of America's 19th-century railroad expansion. Global exports of AI-enabling goods hit nearly $4 trillion last year, with Asia accounting for two-thirds, according to Allianz Trade. Direct AI spending is forecast to reach $2.6 trillion in 2026, up 47% from 2025, and $3.5 trillion in 2027, Gartner data shows.

Asia's chip suppliers are indispensable to the AI build-out regardless of whether software companies monetize their services, making them the figurative picks-and-shovels providers of the gold rush. TSMC alone accounts for more than 41% of Taiwan's Taiex, while Samsung Electronics and SK Hynix together represent 54.6% of South Korea's Kospi — a concentration that has drawn retail investors from taxi drivers to schoolchildren.

Retail frenzy from Seoul to Taipei

Na Se-bin, a 24-year-old software developer in Seoul, has poured nearly all her life savings — roughly $47,000 — into stocks since January. She has seen some holdings double in price and now estimates more than 80% of her social circle is actively investing. "Even friends who have never touched stocks are getting into it," she said. "Everyone's doing something."

The frenzy extends across age groups. More than 180,000 trading accounts for children 18 or younger were opened in the first three months of the year at Toss Securities, a South Korean brokerage. In Taiwan, Yeh Lun-hao, a 37-year-old insurance agent, has seen his portfolio quadruple and recently bought a four-bedroom apartment in Taichung for roughly $440,000. "None of this would have happened if it weren't for semiconductors," he said.

Choi Sung-ho, a 35-year-old elementary school teacher in Seoul, has watched his Korean stock portfolio grow roughly fivefold over the past year to more than $300,000, including bets on leveraged ETFs tracking semiconductor stocks. "Even children at my school have mentioned their parents being happy about their stock returns," he said.

Chip giants reshape market hierarchies

TSMC, the world's largest contract chip maker, has become the seventh-most valuable company globally with a market capitalization exceeding $2.2 trillion — bigger than Tesla or Meta. The company's shares have more than doubled in the past year, and starting wages for an engineer at TSMC can be triple the pay of comparable jobs elsewhere. The company's dominance is so complete that TSMC-branded merchandise — rice cookers, luggage, even red holiday envelopes — sells at a premium on secondary markets.

In South Korea, SK Hynix recently overtook Samsung Electronics as the country's most valuable company, as demand for high-bandwidth memory (HBM) chips used in AI data centers has reshuffled the corporate pecking order. Both companies have hit trillion-dollar valuations and together account for more than half of the Kospi. Workers in Samsung's memory-chip division expect bonuses this year averaging around $400,000, and the company is projected to deliver bigger profits in 2026 than any global firm except Nvidia.

Japan's market has seen similar upheaval. SoftBank Group ended Toyota Motor's 22-year run as the country's highest-valued company this month, only to be supplanted days later by Kioxia, a memory-chip maker whose shares surged from roughly $14 to around $600 over the past year. Even peripheral suppliers have benefited: Toto, the luxury toilet maker whose high-tech ceramics hold silicon wafers during chip fabrication, has seen its stock more than double. Ajinomoto, using byproducts from its umami seasoning to create insulating film for AI chips, is up 50%.

What the rally means for investors

The concentration of market gains in a handful of chip giants creates both opportunity and risk. TSMC's 41.8% weighting in Taiwan's Taiex and the combined 54.6% share of Samsung and SK Hynix in the Kospi mean any disruption to the semiconductor cycle would have outsized effects on those benchmarks. Huang's 18-day tour through Taiwan and South Korea included a pledge to spend $150 billion annually in Taiwan, which he called the epicenter of the AI revolution, but the June 8 trading halt in Seoul after an 8% plunge showed how quickly sentiment can shift.

For investors, the question is whether the hyperscaler spending spree can sustain its pace. The $670 billion in planned 2026 capital expenditures from the four largest cloud providers towers over prior technology investment cycles, and any pullback would ripple directly through Asia's chip supply chain. Japan's Nikkei has surged more than 80% over the past year — triple the return of the S&P 500 — but the rapid gains have drawn comparisons to past asset bubbles in the region.

This article is for informational purposes only and does not constitute investment advice.