Taiwan defeated South Korea and became the dominant force in the world market. The foreign media "produced evidence" and said it all!

Last quarter, the Taiwan Weighted Index (Taiex Index) outperformed the South Korea Composite Stock Price Index (KOSPI) by about 23 percentage points. (European News Agency)

As global stock investors enter the final stage of a critical year that has pushed Taiwan and South Korea to take the lead in global artificial intelligence trade, foreign media Business Standard reported that Taiwan "dethroned" South Korea to become the dominant force in the world market, making Taiwan stocks a more stable investment choice.

Last quarter, Taiwan's weighted index (Taiex Index) outperformed South Korea's Composite Stock Price Index (KOSPI) by about 23 percentage points, recording the largest increase this century. The increase in profit expectations has also exceeded that of South Korea for the first time since March 2025. About 40% of fund managers surveyed by Bank of America last month said they were overweight Taiwan stocks, while 25% were overweight South Korea.

Data compiled by Bloomberg show that Taiwan's weighted index's profit forecast for the September quarter was raised by about 19%, while that of South Korea's Composite Stock Price Index was raised by about 15%.

When asked which market would benefit most from the next phase of the AI ​​cycle, 35% of respondents to the Bank of America survey chose Taiwan, while only 5% chose South Korea.

Factors driving optimism include Taiwan's deeper connections in the artificial intelligence supply chain and brighter prospects for profitability.

Vikas Pershad, portfolio manager at M&G Investments in Singapore, said, "For us, the difference lies not only in the scale of artificial intelligence investments, but also in the nature of the profits that underpin these investments." "Taiwan offers broader and deeper investment opportunities. Its profits mainly come from transaction volume, so its profit expectations have a larger improvement and higher stability. South Korea's profits, in the short term, mainly come from rising stock prices."

Taiwan provides investors with investment opportunities in many areas such as chip design and manufacturing, packaging, networks and servers, which means that as artificial intelligence spending expands, Taiwan has more ways to benefit.

At the same time, South Korea's market dominance is still highly concentrated in two chip manufacturers, Samsung Electronics and SK Hynix. As doubts arise about how long the current memory market upcycle can last, South Korea's market position is also more vulnerable to impact.

Taiwan's weighted index and South Korea's KOSPI have swapped places on global stock market leaderboards this year, even as the latter grabs headlines for its more dramatic moves. Taiwan's weighted index is expected to rise 72% in 2026 and is currently the best performer among more than 90 stock indexes tracked by Bloomberg. South Korea's Composite Stock Price Index ranked second, with an increase of about 63%.

Taiwan's gains came as shares of South Korea's KOSPI heavyweights Samsung and SK Hynix plunged between 19% and 33% in the three months to September. The companies' shares had risen for six consecutive quarters as soaring memory chip prices boosted profits and prompted analysts to quickly raise their profit forecasts. Samsung will test whether it can give investors confidence in its long-term prospects when it reports preliminary earnings on Thursday.

Societe Generale strategist Rajat Agarwal and others wrote in a report that the bank "still prefers to invest in Taiwanese stocks rather than South Korean stocks" given the divergent profit growth trajectories of Taiwan and South Korea.

TSMC’s share price rose 2.9% in the three months to September, marking its sixth consecutive quarter of gains; while Taiwan’s weighted index’s gains were broader than similar indexes dominated by technology stocks, reflecting its diversification of investment opportunities. About 10% of stocks in the index had at least doubled this year as of Tuesday, compared with 4.1% in South Korea's Kospi and 5.7% in Japan's Nikkei 225.