Taiwan has surpassed South Korea as the top performer in global markets amid the AI trade surge. The Taiex Index outperformed the Kospi by 23 percentage points last quarter, the widest gap since 2000. Earnings upgrades in Taiwan have outpaced Korea’s for the first time since March 2025, with 40% of Bank of America fund managers overweight Taiwan versus 25% for Korea.
Analysts cite Taiwan’s broader AI supply chain exposure across chip design, manufacturing, packaging, networking, and servers as a key advantage. In contrast, Korea’s market remains heavily reliant on Samsung Electronics and SK Hynix, making it vulnerable to memory cycle shifts. Taiwan’s benchmark is up 72% in 2026, leading over 90 global equity indexes tracked by Bloomberg, while the Kospi ranks second with ~65% gains.
Samsung and SK Hynix shares fell 19–33% in the three months ended September after a six-quarter winning streak. Societe Generale prefers Taiwan due to diverging earnings trajectories, noting memory price appreciation may slow before normalizing in 2028. The Taiex trades at 18x forward earnings, significantly above the Kospi’s 5.5x, reflecting concerns over Korea’s memory cycle peak and the longstanding 'Korea discount'.
Only 5% of BofA survey respondents favored Korea for the next AI phase, versus 35% for Taiwan. About 10% of Taiex stocks have doubled in 2026, compared to 4.1% for Kospi and 5.7% for Nikkei 225.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing