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CNBC
Asia's trillion-dollar titans are powering — and distorting — its fastest growing stock markets
South Korea's Kospi and Taiwan's Taiex have surged to record highs in 2026, propelled by a handful of AI chipmakers. TSMC now accounts for over 40% of Taiwan's benchmark index, while Samsung Electronics and SK Hynix together make up 42.2% of the Kospi. This concentration has made both markets highly dependent on the global AI spending cycle, amplifying risks from geopolitical tensions, supply chain disruptions, and energy price spikes. Analysts warn that the rallies may be distorted, with Taiwan's market becoming increasingly detached from its domestic economy due to TSMC's dominance, while South Korea's index still reflects broader industrial strength beyond semiconductors. The sheer scale of AI-driven earnings expectations, with South Korean earnings potentially surging 300% this year, adds further vulnerability if AI investment slows. Geopolitical risks, including Taiwan Strait tensions and Middle East conflicts affecting oil prices, pose additional threats to these energy-importing economies.
MonitorConfidence: MediumImmediate horizonGeopolitical risk: High
Published 12 May 2026, 05:55 UTC4 min read
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Summary
TL;DR
- TSMC accounts for over 40% of Taiwan's Taiex index.
- Samsung Electronics and SK Hynix make up 42.2% of South Korea's Kospi.
- Analysts warn of concentration risk and vulnerability to AI spending slowdown.
- South Korea's rally is broader, including shipbuilding, defense, and K-culture sectors.
- Taiwan's market is increasingly tied to TSMC and detached from domestic economy.
- Goldman estimates South Korean earnings could surge 300% this year.
- Geopolitical tensions and energy import costs are additional risks.
Interesting facts
- South Korea's market still captures a broad swathe of the domestic economy beyond semiconductors, unlike Taiwan.