AI chip demand boosts South Korea and Taiwan exports, but gains stay narrow

In short: AI-related demand for chips is pushing up exports and stock prices in South Korea and Taiwan, but most of the broader economy is not seeing the same lift.

What's going on

South Korea and Taiwan sell a lot of technology products overseas, especially semiconductors, which are the tiny parts that make computers work (like the engine parts inside a car). Demand for chips used in AI systems has risen sharply, and that has helped both countries’ export-heavy sectors and stock markets.

In South Korea, recent reports describe a strong AI-driven rally in the KOSPI, the country’s main stock index. The gains have been led by memory chip makers that supply parts used in AI servers and data centers, which are large buildings full of computers that run online services. Coverage cited in the reporting says the index crossed 5,000 for the first time and later reached 8,000, showing how fast the rally picked up in 2025 and 2026.

But the market’s gains are heavily concentrated. Samsung Electronics and SK Hynix make up a large share of the KOSPI’s weight and trading activity, so the index can rise even if many other companies are not doing well. Separate reporting also points to weaker domestic demand, GDP shrinking in the final quarter of last year, and full-year growth of about 1%.

For Taiwan, the same pattern is tied to advanced semiconductor exports, especially chips used in AI servers and data centers. The lift is most visible in a narrower group of technology manufacturers and their suppliers, rather than across the whole economy.

What to watch

A key question is whether AI chip demand stays strong, and whether the gains spread beyond a small set of chip leaders. If global spending on AI data centers slows, countries that rely on a few major exporters could feel the impact quickly.

Source: NYTimes