Semiconductors are dominating; the market value of the Korean stock market surpasses the United Kingdom; Taiwan has the highest weight among emerging markets, ahead of China.

Global stock markets are undergoing a profound structural reorganization driven by the rapid development of the artificial intelligence (AI) industry. Benefiting from the absolute advantages of the semiconductor hardware supply chain, the size of the capital markets in South Korea and Taiwan has recently shown significant growth. According to the latest market data, South Korea’s stock market total market capitalization has reached $4.04 trillion, officially surpassing the United Kingdom’s $3.99 trillion and becoming the world’s eighth-largest stock market. Meanwhile, Taiwan’s stock market total market capitalization has climbed further to $4.48 trillion; not only has it long surpassed the United Kingdom, but for the first time, its weight in the MSCI Emerging Markets has also exceeded China.

AI hardware demand drives reassessment of the capital structure

The recent rotation in market sectors reflects global capital’s “structural reorganization” of the AI hardware supply chain—not short-term tactical asset allocation. As AI applications become widespread, demand for advanced foundry capacity and memory is entering a super cycle. This momentum has translated into tangible growth in the stock markets of South Korea and Taiwan. For example, Samsung Electronics and SK hynix currently account for more than 40% of the market value in South Korea’s composite stock price index (Kospi). This shows that global capital is concentrating into Asian markets that hold core technologies for AI infrastructure.

A leap in the market size of Taiwan and South Korea, and changes in the emerging-market sector

Taiwan and South Korea have already achieved a significant leap in terms of capital market size. Taiwan’s stock market total market capitalization is $4.48 trillion, surpassing the United Kingdom and approaching Canada. With TSMC accounting for about 45% of the benchmark index, Taiwan’s weight in the MSCI Emerging Markets has also, for the first time, exceeded China. By contrast, Europe’s largest stock market, the United Kingdom, has only grown modestly by about 3% this year, mainly because its market structure is still dominated by traditional finance, consumer sectors, and energy. This disparity highlights that Asian markets with strong technological innovation capabilities are winning growing favor from international capital.

Source: Bloomberg Policy support helps Taiwan and South Korea’s stock markets hit new highs again and again

In addition to support from the industry fundamentals, policy is also a key driver of market momentum. The South Korean government’s corporate governance reforms and pro-market policies have effectively boosted overall valuations. Wall Street investment institutions have taken a positive view—for example, Goldman Sachs, based on its expectation that South Korea’s corporate earnings will grow by more than 200% in 2026, has raised its Kospi index target significantly to 8,000 points.

(From day-trading retail investors to South Korea’s president, Lee Jae-myung leads KOSPI to set new highs again)

On the Taiwan side, the Financial Supervisory Commission has also recently been actively promoting multiple macro-financial policies aimed at comprehensively enhancing the international competitiveness of the capital market. Among these, opening foreign bonds and allowing collateralization of foreign-currency assets, as well as officially launching the “Asia Asset Management Center Kaohsiung Special Zone,” are two of the most policy-significant measures. The most direct market impact in the near term is the new rules industry refers to as the “TSMC clause,” which relax the single-stock holding limit for active funds and ETFs. It increases the portion of fund holdings from the current 10% to up to 25%, allowing TSMC (2330) to surge to a historic high of 2330 for a time yesterday, and also pushing Taiwan’s Weighted Index to briefly cross the 40,000 level.

(TSMC 2330 stock price sets a new high: the TSMC clause loosens the fund holding cap)

This article, with semiconductors at the forefront, says the South Korean stock market value surpassed the United Kingdom, and Taiwan’s weight in emerging markets first exceeded China. It first appeared on the chain-news outlet ABMedia.