Taiwan Surpassed Korea in AI Equity Market Exposure
The Taiex index outperformed the Kospi by 23 percentage points in Q3 2026, signaling a shift in investor preference.
Updated on Oct. 7, 2026 in Artificial Intelligence
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Taiwan has overtaken South Korea as the premier equity market for AI-related investment, with the Taiex index beating the Kospi by 23 percentage points in the third quarter of 2026. This trend follows an increasing concentration of capital in Taiwan’s diverse AI supply chain.
Why it matters
The shift reflects a move toward broader AI supply chain exposure, as Taiwan encompasses chip design, manufacturing, and server production, while Korea’s market remains heavily concentrated in memory-focused firms. The divergence highlights how investors are weighing volume-driven growth in Taiwan against price-dependent gains in Korea.
The Taiex trades at 18 times one-year forward earnings, significantly higher than the Kospi’s 5.5 multiple. In the quarter ended September 2026, shares of key Korean firms Samsung Electronics and SK Hynix declined between 19 percent and 33 percent.
The players
Bank of America
A multinational financial services firm that tracks global fund manager sentiment and institutional capital allocation.
Samsung Electronics
A major conglomerate and leader in memory chip production that serves as a primary driver for the Kospi index.
SK Hynix
A global semiconductor manufacturer specialized in high-bandwidth memory for AI and enterprise applications.
Citigroup
A global financial institution providing equity analysis and sector-specific demand forecasts for the semiconductor industry.
The details
Taiwan’s market lead is built on a comprehensive AI supply chain that spans chip design, manufacturing, packaging, networking, and server production. In contrast, Korea’s AI exposure is concentrated in Samsung Electronics and SK Hynix, where earnings are currently tethered to memory pricing rather than broader volume growth. According to Citigroup, high-bandwidth memory demand is projected to exceed current expectations through 2027.
Timeline
March 2025: Taiwan began outpacing Korea in earnings upgrades.
July 2026: The Korean market began a period of deleveraging.
September 2026: Bank of America surveyed fund managers regarding their regional overweights.
2026: The Taiex index recorded a 72 percent year-to-date gain.
2028: Memory chip prices are expected to reach normalization.
The Tech Race
This performance gap follows the findings of the 2026 Bank of America fund manager survey, which captured a distinct pivot in institutional capital allocation. The current market alignment favors Taiwan's multifaceted supply chain over Korea's specialized, price-sensitive memory strategy.
Retail and institutional investors with exposure to Asian tech markets will see significant divergence in portfolio performance tied to whether their holdings favor Taiwan’s broad manufacturing base or Korea’s concentrated memory sector. This shift underscores the importance of diversifying AI exposure across the full chip-to-server production stack.
The takeaway
Market leadership is currently defined by the diversity of a country's AI supply chain rather than single-sector dominance. Investors should track future earnings reports for Samsung Electronics and SK Hynix to gauge if memory price trends begin to stabilize before 2028.
What happens next
Investors are watching for the projected normalization of memory chip prices in 2028 and updated demand forecasts for high-bandwidth memory.
Further reading
For broader trends in the industry, explore our Artificial Intelligence section.
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