A surge in demand for AI chips has pushed Taiwan's equity market past the United Kingdom, lifting its market value to about US$4.3 trillion. South Korea remains roughly US$140 billion behind as Samsung Electronics and SK Hynix rally on memory demand for AI systems. The movement is concentrated in a handful of large-cap chip firms, amplified by ETF flows and investor rotation into stocks with clear exposure to AI hardware.

Market move: size and speed Taiwan's equity market now stands near US$4.3 trillion, a level that moved it past the United Kingdom in total market value. South Korea is roughly US$140 billion behind after rapid gains in a few large technology firms. The immediate catalyst has been companies supplying the silicon and memory that power generative AI systems: advanced logic foundries and high-bandwidth memory producers. The shift unfolded in months as investors rotated capital into stocks with clear exposure to AI hardware orders and away from markets weighted to non-tech sectors such as finance. Asian markets with dense technology weightings have therefore surged past major European markets dominated by banks and other financial firms. Which companies drove the change The rally is concentrated in a small set of large-cap chip firms: - TSMC: shares have climbed more than 40% this year, making it one of the largest companies globally by market value. - Samsung Electronics and SK Hynix: each has risen more than 80% over the same period, driven by booming memory demand. Those rapid gains altered market capitalisations quickly, concentrating liquidity around a handful of hardware suppliers and related vendors. What the earnings show TSMC’s January–March results help explain investor appetite: net profit rose 58.3% to NT$572.5 billion, with revenue up 35% year on year to NT$1.13 trillion. Management said advanced nodes were the main driver, with 3‑nanometre and 2‑nanometre process wafers accounting for more than 70% of wafer revenue in the quarter. That concentration provided outsized earnings leverage as customers paid for leading-edge capacity and higher-margin process technology. In South Korea, memory demand tied to AI infrastructure has helped revive earnings for Samsung and SK Hynix. Trade data tracked the upswing: Taiwan’s March export orders expanded at the fastest pace in 16 years, while South Korea’s exports rose more than 40% for a second month, both supported by strong chip shipments. Flows, ETFs and retail interest Index and ETF activity amplified the move. The iShares MSCI South Korea ETF (EWY) returned roughly 37% year-to-date through 11 March 2026, reflecting the concentration of large-cap memory names in its portfolio. That performance drew institutional and retail attention, increasing capital inflows to Korean equities and lifting local market valuations. Overall, market liquidity has gravitated to firms with concrete order books and measurable exposure to AI hardware — foundries, memory makers, advanced packaging suppliers and equipment vendors — while stocks lacking that clarity saw more selective and often volatile price action. Supply-chain strains and cost pressures Strong demand has not eliminated operational risks. TSMC flagged potential disruptions and higher costs tied to specialty inputs, including industrial gases such as helium, underlining that supply-chain and input-cost pressures remain relevant even amid a robust revenue backdrop.

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TSMC reported that 3‑nanometre and 2‑nanometre nodes made up more than 70% of wafer revenue in the January–March quarter.

This article was created with AI assistance.