Asia’s AI boom is showing no signs of cooling off, and the latest surge in AI chip stocks has turned Seoul’s stock market into the hottest trading floor on the planet. What began as a wave of enthusiasm around artificial intelligence has now morphed into a full-blown investor stampede across Asia, with South Korean chip makers and their Taiwanese peers pulling in huge gains as the world scrambles for the hardware behind the AI revolution.
The numbers tell the story. Samsung Electronics, SK Hynix and TSMC — Asia’s three most valuable companies — are all chip makers, and their latest earnings have reminded investors where the real money in AI is being made. While Silicon Valley names are still spending heavily to build the future, Asia’s suppliers are already selling the picks and shovels of the boom, and they are doing it at scale. That distinction matters, because in this part of the market the cash is already flowing.
At Samsung, chip revenues surged by nearly 50 times in the last quarter, a stunning jump that helped fuel a broader rally in Korean equities. South Korea’s Kospi index has doubled in just over six months, an extraordinary move even by the standards of a market driven by global tech hype. For ordinary investors, that has meant the familiar mix of excitement and regret that tends to arrive when a sector suddenly becomes the centre of attention.
Retail traders in South Korea — known locally as “ants” because of the way they move together — have piled in aggressively. Leveraged buying of Kospi shares hit a record ₩25-trillion, or about R280-billion, in late April, according to market data. It is a classic case of fear of missing out, and it is spreading fast. As one investor, Kwon Soon-kuk, put it, the chip rally has forced people to look elsewhere in the AI trade before it runs away without them.
For South African readers watching global markets, the lesson is familiar: whenever a new technology cycle takes hold, the businesses supplying the infrastructure often benefit before the headline names do. In this case, the winners are not just the software platforms or chatbot developers grabbing the headlines, but the firms that manufacture the advanced memory chips, foundry capacity and semiconductor tools that AI depends on.
AI chip stocks are driving a seller’s market in Asia
The latest leg of the rally is being powered by the idea that AI chip stocks are still underpriced relative to the demand outlook. Samsung, SK Hynix and TSMC all supply components to the so-called “Magnificent 7” US tech giants, and they are also key partners to Nvidia, the chip designer that has become central to the AI buildout. That means the AI trade is no longer just a story about American valuations — it is now also a story about Asian manufacturing capacity.
According to Alex Huang, chairman of the fund arm of Fubon Financial Holding, this is “a seller’s market for AI suppliers”. In other words, the companies with the capacity to produce these chips are in the stronger negotiating position. Nvidia may be the face of the AI boom, but the market is increasingly focused on who can actually deliver the goods, and on what terms.
That power dynamic is especially important in Taiwan and South Korea, where chipmakers have secured long-term contracts with customers. Sam Konrad of Jupiter Asset Management said those multi-year agreements suggest the AI cycle may last much longer than many had expected. His view is echoed by the large amount of capital now parked in the region, with nearly half of his fund invested in Taiwan and South Korea.
The implication is straightforward: the AI story is not just about one-quarter earnings spikes. It is about the build-out of a global supply chain that may remain tight for years. When production lines are fully booked, as they are in much of Asia’s chip sector, pricing power tends to stay firmly with the seller.
Samsung’s latest results underline that shift. The company reported an eightfold jump in first-quarter profit, with chips accounting for 94% of a record ₩57.2-trillion total. Its share price has more than doubled this year, and this week it crossed the US$1-trillion market capitalisation mark, becoming only the second Asian company after TSMC to reach that milestone.
SK Hynix has delivered an even more dramatic turnaround. Just 16 months ago, the company was worth less than US$100-billion. It is now closing in on US$800-billion, a valuation that would put it within striking distance of JPMorgan, the world’s most valuable bank. It has also agreed to share 10% of annual operating profit with employees, a deal that could translate into an average payout of around US$680 000 per worker in 2027, based on Reuters calculations.
The broader economic spillover has been impossible to ignore. Taiwan’s first-quarter GDP jumped 13.69%, its fastest pace in nearly four decades, while South Korea’s economy grew by 1.7%, the quickest rate in almost six years. Those figures point to the scale of the AI-driven manufacturing cycle now coursing through the region.
Chris Lo, vice president at Nomura Asset Management Taiwan, said the AI theme is behind the surge in capital spending from cloud service providers, which is running at about 70% year on year. He added that many Taiwanese companies have had production capacity booked out through 2027, a sign of just how deep the demand pipeline runs. For investors, that kind of visibility is gold.
But the rally is also starting to raise eyebrows. Markets that rise this quickly rarely do so without drawing warnings, and some analysts are now asking whether the excitement has gone a little too far. If the big AI companies struggle to raise money, or if demand softens, the impact would be felt immediately by the chip suppliers that have ridden the wave higher.
Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore, said the situation is beginning to look dangerous. That is the risk with any euphoric trade: once valuations get ahead of fundamentals, the market can turn quickly. For now, though, the momentum remains with Asia’s chip giants, and the AI chip stocks rally is still being fuelled by real earnings, real demand and real scarcity.
As we reported earlier, the AI boom is no longer confined to the US tech narrative. It has moved decisively into Asia, where the manufacturers of advanced semiconductors are now at the centre of the global race. Whether this turns into a longer-lasting re-rating or a sharp correction will depend on one thing above all: whether the world’s appetite for AI keeps rising fast enough to justify the billions pouring into chips, factories and supply chains across the region.