Korea, Taiwan, and the US Benefit from AI Investment Boom... Concentration Expected to Continue

Securities analysts have diagnosed that the trickle-down effect of the artificial intelligence (AI) investment cycle is relatively concentrated in the economies and stock markets of Korea, Taiwan, and the United States. This trend of polarization is expected to continue for the time being.

Park Sanghyun, a researcher at iM Securities, stated in a recent Economy Brief that "the AI-driven rally and the K-shaped polarization by country and industry are accelerating."

Recently, Korea's first-quarter gross domestic product (GDP) growth rate delivered a significant surprise, buoyed by a boom in the semiconductor sector. Similarly, Taiwan, another major semiconductor exporter, also posted a first-quarter GDP growth rate of 13.7%. Considering that Taiwan’s average quarterly growth rate between 2015 and 2024 was 3.3%, this is an exceptionally rare figure.

Researcher Park assessed, "The benefits of the AI investment cycle are relatively concentrated in the economies and stock markets of Korea, Taiwan, and the United States, as confirmed by the first-quarter growth rates and export indicators of these countries."

He noted that, despite the United States' first-quarter GDP growth rate falling short of market expectations, investment in the country still recorded double-digit growth, adding, "(In the United States) this indicates that the shift toward an AI-centered economic structure is progressing rapidly." He further commented, "The trickle-down effect of the AI investment boom in the United States is translating into a semiconductor export boom in Taiwan and Korea."

Researcher Park stated, "This AI-driven polarization by country and industry is likely to persist for some time." He added, "While the high oil prices triggered by the Iran situation are a variable, unless oil prices surge further, the AI investment boom cycle is unlikely to be significantly disrupted." He also diagnosed that the recent strengthening of the yen and the Australian dollar signals an increase in global investors’ risk appetite.

Researcher Park explained, "Korea’s strong semiconductor-driven exports, Taiwan’s first-quarter GDP growth surprise, robust investment in the United States, and the strong yen and Australian dollar all point to a rally in tech stocks and a strengthening preference for risk assets among global investors." He concluded, "This suggests that the trend of concentration on the stock markets of Korea, Taiwan, and the United States will likely continue for the foreseeable future."

This content was produced with the assistance of AI translation services.