The AI-Driven Surge in Emerging Asian Equities: Why Taiwan and South Korea Are Leading the Charge

The global AI infrastructure arms race has ignited a seismic shift in capital allocation, with emerging Asian equities-particularly those from Taiwan and South Korea-emerging as dominant beneficiaries. As artificial intelligence transitions from a disruptive force to a foundational pillar of the digital economy, these two nations have leveraged their semiconductor expertise, strategic policy frameworks, and corporate innovation to secure a commanding position in the AI value chain. This analysis examines how capital flows, government initiatives, and corporate partnerships are propelling Taiwan and South Korea to the forefront of the AI-driven equity surge.

South Korea: A Regulatory-Industrial Powerhouse

South Korea's , enacted in 2024 and set to take effect in 2026, has established a unified legal structure to govern AI development while fostering industrial growth. This legislation, which combines regulatory oversight with R&D incentives, has catalyzed a surge in infrastructure investments. For instance, the Act mandates government support for AI data centers and training resources, directly benefiting firms like Samsung Electronics and SK Hynix. These companies have capitalized on the policy tailwinds, securing a pivotal role in OpenAI's -a global AI infrastructure expansion project. Under this partnership, Samsung and SK Hynix are scaling production of advanced memory chips to meet OpenAI's demand for next-generation AI models, .

The Stargate collaboration extends beyond chip manufacturing. Samsung C&T and Samsung Heavy Industries are pioneering floating data centers, which reduce land use and cooling costs, while SK Telecom is building a regional AI data center in South Korea's southwest. These projects align with the government's vision to position the country as a top-three global AI leader by 2026. Meanwhile, , , driven by strategic acquisitions in semiconductors and AI.

This dynamic ecosystem underscores South Korea's ability to balance regulatory rigor with industrial agility.

Taiwan: The Semiconductor Engine of AI

Taiwan's dominance in the global semiconductor industry has positioned it as an indispensable player in AI infrastructure. , driven by demand for 3nm and 5nm chips used in AI servers. . fabrication facilities underscores its strategic pivot to secure government incentives and meet surging global demand. TSMC's leadership is further reinforced by its role in the World Semiconductor Trade Statistics' , with logic and memory segments directly catering to AI workloads.

Taiwan's government has complemented this corporate momentum with forward-looking policies. The , alongside the AI Action Plan, aim to establish a robust AI ecosystem by 2040. While the draft "Basic Act for Artificial Intelligence" remains pending, the Ministry of Digital Affairs has already launched the AI Product and System Evaluation System to align with international standards. These initiatives, coupled with , highlight Taiwan's strategic focus on leveraging its semiconductor prowess to dominate the AI infrastructure landscape.

The surge in capital allocation is also evident in equity markets. , , driven by investor confidence in AI-driven growth. This trend is further amplified by the global AI infrastructure "supercycle," , capital expenditures, and M&A.

Investment Implications and the Road Ahead

For investors, the AI-driven equity surge in Taiwan and South Korea presents a compelling case. South Korea's regulatory-industrial synergy, exemplified by the AI Framework Act and Stargate partnerships, ensures a balanced approach to innovation and governance. Meanwhile, Taiwan's semiconductor-led strategy, anchored by TSMC's global footprint and government policies, positions it as a critical node in the AI infrastructure network.

However, challenges remain. South Korea's AI Framework Act has faced criticism for potentially stifling innovation through broad regulatory definitions, while Taiwan's reliance on semiconductor exports exposes it to geopolitical risks. Nonetheless, the resilience of these markets-evidenced by their ability to defy a global FDI decline and in 2025-suggests that their AI-driven trajectories are firmly entrenched.

Conclusion

As the AI era accelerates, Taiwan and South Korea stand out as exemplars of strategic foresight and industrial execution. Their ability to harmonize government policy, corporate innovation, and global capital flows has not only solidified their leadership in AI infrastructure but also redefined the contours of emerging Asian equities. For investors seeking exposure to the next frontier of technological growth, these markets offer a unique confluence of opportunity and resilience.