At the centre of the rally are three Asian semiconductor giants—Taiwan Semiconductor Manufacturing Co, Samsung Electronics, and SK Hynix—whose surging earnings have reinforced their dominance in the global AI supply chain.
The boom has become so intense that workers at SK Hynix could reportedly receive future profit-sharing bonuses worth hundreds of thousands of dollars, while retail investors in South Korea are pouring record amounts of leveraged money into stocks out of fear of missing the rally.
AI Demand Drives Historic Gains
The latest earnings season underscored just how critical Asian chipmakers have become to the global artificial intelligence race.
Samsung’s semiconductor revenue reportedly surged nearly 50-fold in the latest quarter, helping drive an explosive rally in its stock price. The company’s market capitalization has now crossed the $1 trillion mark, making it only the second Asian company after TSMC to reach that milestone.
Meanwhile, SK Hynix has experienced one of the most dramatic rises in corporate value anywhere in the world. Worth less than $100 billion just over a year ago, the company is now approaching an $800 billion valuation, powered largely by soaring demand for high-end AI memory chips.
Industry analysts say the global shortage of advanced memory chips has effectively created a seller’s market for Asian suppliers.
“It’s a seller’s market for AI suppliers,” said Alex Huang, chairman of Fubon Financial Holding’s fund arm, which holds shares in TSMC.
“Rather than pricing, what Nvidia is worried about is failing to secure capacity,” he added.
Retail Investors Rush In
The AI-fueled surge has sparked a wave of speculative enthusiasm among South Korean retail investors, often referred to locally as “ants” because of their collective market behavior.
Data showed leveraged purchases of KOSPI-listed stocks climbed to a record 25 trillion won in late April as investors rushed to gain exposure to AI-linked shares.
One retail investor, 34-year-old office worker Kwon Soon-kuk, said he was determined not to miss another major market rally after sitting out the post-pandemic boom in 2020.
“After the rally of semiconductor stocks, other AI-related stocks will now have to catch up,” he said.
South Korea’s benchmark KOSPI index has now doubled in just over six months, making it one of the strongest-performing major equity markets globally.
Why Investors Prefer Asian Chipmakers
Many institutional investors are increasingly viewing Asian semiconductor companies as safer and more profitable AI plays compared to some Silicon Valley technology firms.
Unlike major U.S. tech companies that are spending enormous sums to develop AI systems and infrastructure, Asian manufacturers are already generating substantial profits from supplying the chips and hardware needed to power the industry.
Samsung, SK Hynix, and TSMC all supply components to major American technology firms, including the so-called “Magnificent Seven,” while also manufacturing hardware used by Nvidia, the dominant force in AI computing.
Sam Konrad, investment manager at Jupiter Asset Management, said the growing number of long-term supply agreements signed by chipmakers suggests the AI expansion cycle could last much longer than many initially expected.
Economic Impact Extends Beyond Wall Street
The AI-driven semiconductor boom is also reshaping the broader economies of South Korea and Taiwan.
Taiwan recorded a massive 13.69% jump in first-quarter GDP growth—the strongest in nearly four decades—while South Korea’s economy expanded by 1.7%, its fastest pace in almost six years.
Chris Lo, vice president at Nomura Asset Management Taiwan, said the surge in AI-related capital expenditure continues to accelerate.
“It’s all built on AI,” he said, noting that cloud service providers are increasing spending by roughly 70% year-on-year.
“Many Taiwan companies’ production capacities have been fully booked through 2027,” he added.
Huge Bonuses Reflect AI Windfall
The financial gains are increasingly flowing down to employees as well.
SK Hynix has reportedly agreed to distribute 10% of annual operating profits to workers, and projections suggest some employees could eventually receive average payouts of up to $680,000 by 2027 if current earnings momentum continues.
The scale of those figures reflects just how profitable the AI hardware race has become for chip suppliers.
Warnings Emerging Despite Strong Momentum
Despite the optimism, some market observers are beginning to warn that valuations may be climbing too quickly.
Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore, cautioned that investor enthusiasm may eventually become excessive.
“My sense is that it is getting dangerous,” he said.
Analysts also warn that any slowdown in fundraising by major AI firms or a decline in infrastructure spending could sharply reduce demand for semiconductors and weigh on future earnings.
Still, many investors believe the rally has further room to run. Market strategists note that global funds pulled nearly $50 billion from South Korean and Taiwanese stocks earlier this year, meaning positioning may not yet be overcrowded.
Ian Samson, a portfolio manager at Fidelity International, said his firm continues to increase exposure to both markets.
“Regardless of what you think of valuations or earnings, in the near-term positioning is what matters,” he said. “And that has cleared up significantly.”
For now, Asia remains firmly at the centre of the global AI boom, with Taiwan and South Korea emerging as the critical engine rooms powering the next phase of the artificial intelligence revolution.