The wave of AI chips is reshaping the global stock market landscape: Taiwan and South Korea are soaring in AI hardware, surpassing Europe's Germany, France, and Britain in market value.

The outbreak of artificial intelligence is causing a drastic reorganization of the global stock market landscape, with Taiwan and South Korea surpassing European countries one by one. According to market compilation data, the market value of Taiwan's stock market currently approaches 4.3 trillion US dollars, surpassing the largest market in Europe, the UK, earlier this month. South Korea is only about 140 billion dollars away from surpassing the UK. In the past seven months, these two Asian markets dominated by technology stocks have successively surpassed Germany and France. This change is mainly attributed to the significant rise in the stock prices of three AI hardware core suppliers: the world's largest semiconductor foundry, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), and leading memory manufacturers in South Korea, Samsung Electronics and SK Hynix. In comparison, the weight of European stock markets is more inclined towards financial enterprises. Fidelity International portfolio manager Ian Samson said, "The rapid rise of South Korea and Taiwan is due to the long-term trend that 'semiconductors are the new oil,' with semiconductors becoming a key input in economic activities, coupled with the recent frenzy of price-insensitive AI investments." This reflects the "oligopoly characteristics of cutting-edge semiconductor manufacturing". As AI technology continues to develop and advance, despite concerns about the impact of tariffs and the situation in Iran, Asia's core position in the global economy is further consolidated. Driven by strong chip shipments, Taiwan's export order growth rate in March is the fastest in 16 years, and South Korea's exports have grown by over 40% for the second consecutive month. Investors are increasingly clear about Asia's role: Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, Samsung, and SK Hynix are seen as key suppliers to the AI leader NVIDIA Corporation. The stock price of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has risen by more than 40% this year, while the two South Korean companies have seen gains of over 80%. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR currently has a market value of 1.8 trillion US dollars, ranking among the world's largest companies, while the combined market value of the two South Korean giants is 1.5 trillion US dollars. The market value of ASML Holding NV ADR (ASML.US), the largest chip equipment manufacturer in Europe, is less than any of the above. In fact, the combined market value of all technology stocks in the Stoxx Europe 600 index is only about 1.4 trillion US dollars. Technological dominance Eva Lee, head of stocks at UBS Group AG's global wealth management in Greater China, said, "This trend can be roughly seen as a differentiation between the technology and non-technology industries. Although some AI-related stocks in Europe have also shown strong gains since the beginning of the year, the impact on the Korean and Taiwanese markets is more significant due to the higher weighting of technology stocks." Although the stock market value of the Asian chip powerhouses has skyrocketed, their economic size is still significantly smaller than that of major European countries. The International Monetary Fund projects South Korea's gross domestic product to be $1.9 trillion this year and Taiwan's to be $977 billion, much lower than the forecasted values of over $3 trillion for Germany, the UK, and France. Of course, given the high weighting of technology stocks in Asian market indices, some investors have issued warnings about the excessive influence of technology stocks. Samsung and SK Hynix together account for 42% of the South Korean Kospi index benchmark, while Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR alone accounts for a similar proportion in the Taiwan Taiex index. However, as AI technology becomes more integrated into daily life and the demand for various hardware and applications continues to expand, AI investment is broadening. Stocks like MediaTek and Delta Electronics have risen, while the index weight of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has actually decreased from recent highs. Francesco Chan, an emerging markets and Asia-Pacific investment expert at J.P. Morgan Asset Management, said, "From the index perspective, the AI story in Asia seems to be concentrated on a few leaders, but it is more widespread throughout the entire supply chain. Although the top companies are getting larger, as AI capital spending continues to penetrate downstream, investment opportunities are also expanding." After surpassing the UK, Taiwan's market value is approaching that of Canada, which has benefited from the rise in gold and other resource stocks. India is ranked higher, but its stock market is under pressure due to rising energy prices and weakness in the banking and IT sectors. Currently, with a relatively lack of technology stocks, Europe's position on the global market value rankings is gradually being overtaken. Yi Ping Liao, a portfolio manager at Franklin Templeton Investments, said, "Europe is more focused on mature industries, leading to a slower growth trajectory in market value. South Korea, Taiwan, and the broader North Asian region have established enduring advantages in innovation, talent, and manufacturing scale, particularly in key growth industries, attracting global capital continuously." In addition to institutional funds, retail investors attracted by the AI stock frenzy are providing increased support for the strong Asian stock markets. South Korea is seeing a resurgence of "ant" retail traders known for their coordinated action, and retail participation in Taiwan is also on the rise. Vikas Pershad, an Asian stock portfolio manager at M&G Investments, said, "Across Asia, we see domestic investors playing an increasingly important role." He added that from a long-term perspective, he believes the growth in market value of Taiwan and South Korea is "reasonable".