Taiwan Stocks Outperformed Korea in Third Quarter
The Taiex index beat the Kospi by 23 percentage points as investors favored broad AI supply chain exposure.
Updated on Oct. 7, 2026 in Stock Markets
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The Taiex Index secured its position as the top-performing equity market among 90 global indexes tracked by Bloomberg during the third quarter of 2026. This performance gap widened as Taiwan earnings estimates climbed while Korea faced significant market headwinds.
Why it matters
Taiwan offers investors broader exposure across the artificial intelligence supply chain, including chip design and servers, while Korea remains heavily reliant on specific electronics giants. This structural difference has led to divergent investor sentiment and performance outcomes.
The Taiex trades at 18 times one-year forward earnings compared to 5.5 for the Kospi. Meanwhile, 40% of fund managers surveyed in September reported being overweight on Taiwan, contrasting with just 25% for Korea.
The players
Taiex Index
This is the primary stock market index for the Taiwan Stock Exchange.
Kospi
This index tracks all common stocks traded on the Korea Exchange.
Bank of America
This multinational investment bank and financial services holding company conducts regular surveys of global fund managers.
Samsung Electronics
This is a South Korean multinational manufacturing conglomerate and a central player in the global semiconductor market.
SK Hynix
This South Korean supplier of dynamic random-access memory chips is one of the largest semiconductor manufacturers in the world.
The details
Taiwan's market strength is driven by widespread participation across chip design, manufacturing, packaging, and networking. Conversely, the Kospi has suffered from a high concentration in Samsung Electronics and SK Hynix, which saw share prices fall by up to 33% during the third quarter.
Timeline
March 2025 marked the previous period when Taiwan earnings upgrades outpaced Korea.
July 2026 saw South Korea experience a period of market deleveraging.
September 2026 served as the conclusion of the third-quarter earnings period.
The Taiex Index recorded a total performance gain of 72% throughout 2026.
Global memory chip prices are expected to normalize by 2028.
Market Dynamics
This trend reflects a broader shift toward diversified AI infrastructure investments over traditional memory-heavy semiconductor models. It mirrors historical cycles where market leadership pivots based on supply chain depth rather than singular commodity pricing.
Retail investors should note that the performance gap suggests a premium valuation for Taiwan equities at 18 times forward earnings. Those with heavy exposure to Korean semiconductor firms may face continued volatility as memory price appreciation slows in upcoming quarters.
The takeaway
The outperformance of Taiwan highlights the market's preference for broad AI infrastructure growth over individual memory chip providers. Investors should balance portfolios to account for differing exposure levels to global semiconductor demand cycles.
Further reading
For broader trends in global equity movements, see our analysis of Stock Markets.
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