The AI revolution has a new capital – and it’s not in California

Just as the world’s AI bulls looked to be running out of puff, a fresh investor frenzy has hit Asia’s tech names, making Seoul’s stock market the world’s hottest and delivering bonuses of half a million dollars to workers at one Korean chip maker.

Asia’s three most valuable companies are chip makers — TSMC, Samsung Electronics and SK Hynix — and their recent record earnings have put the spotlight on their critical role in the global AI supply chain.

Chip revenues leapt nearly 50 times at Samsung last quarter and South Korea’s benchmark Kospi has doubled in little more than six months.

Investors big and small have piled in. Underscoring the fear of missing out, leveraged buying of Kospi shares by South Korean retail investors, known locally as “ants” due to their collective behaviour, hit a record of ₩25-trillion (R280-billion) in late April, data showed.

“After the rally of semiconductor stocks, other AI-related stocks will now have to catch up,” said Kwon Soon-kuk, a 34-year-old office worker who is chasing the market now after missing out on the post-pandemic rally in 2020.

Meanwhile, bigger investors are buying the story that Asian chip makers and their suppliers already make a lot of money from AI, in contrast to Silicon Valley names whose heavy spending on chips and technology makes them riskier bets.

Seller’s market

Samsung, SK Hynix and TSMC all count the “Magnificent 7” US tech giants as customers and sell hardware to Nvidia, a designer that’s grown into the backbone of the AI industry.

“It’s a seller’s market for AI suppliers,” said Alex Huang, chairman of Fubon Financial Holding’s fund arm which owns TSMC shares. “Rather than pricing, what Nvidia is worried about is failing to secure capacity. When it comes to setting product prices and passing on costs to customers, Taiwan has formidable power.”

Asian chip makers have signed multi-year agreements with customers, a move that Sam Konrad, investment manager at Jupiter Asset Management, said signals that the AI cycle is likely to go on much longer than many had expected. Nearly half of his fund is invested in Taiwan and South Korea.

Read: Honey, I shrunk the chips – inside TSMC’s 2nm breakthrough

The result has been a gusher of cash into the accounts and stock of almost anyone along the AI supply chain, and with Asia at the heart of chip manufacturing, the region has become the epicentre of the boom.

The region is home to what Andy Wong, head of multi-asset investment at Pictet Asset Management, calls “a shrimp among whales”: compact but highly advanced tech hubs that have quietly become indispensable to the global AI buildout.

“In certain tech themes, Asia has the best companies in the world,” he said, citing segments such as memory and foundry.

Samsung’s first-quarter profit increased eightfold, with chips responsible for 94% of the record ₩57.2-trillion total. Its stock price has more than doubled this year and this week it crossed the US$1-trillion market cap threshold, only the second Asian company to do so after TSMC.

SK Hynix, a chip maker which was worth less than $100-billion 16 months ago, is closing in on $800-billion, which would put it within reach of JPMorgan, the world’s most valuable bank.

It struck a deal to share 10% of its annual operating profit with workers, which in 2027 could amount to an average per worker payout of $680 000, according to Reuters calculations.

The spillover is powering the economies of South Korea and Taiwan, with Taiwan’s 13.69% jump in first-quarter GDP the biggest in nearly four decades and South Korea’s 1.7% growth the fastest in nearly six years.

“It’s all built on AI,” said Chris Lo, a vice president for Nomura Asset Management Taiwan, who said the growth rate for capital spending from cloud service providers is 70% year on year, with room for upward revisions. “Many Taiwan companies’ production capacities have been fully booked through 2027.”

To be sure, there are distorting effects and risks. Any sign that big AI firms are finding fundraising harder would curtail chip makers’ spending and hurt future earnings, while soaring stock prices are also starting to draw warnings.

Read: How Panther Lake put Intel back in contention

“My sense is that it is getting dangerous,” said Nick Ferres, chief investment officer of Vantage Point Asset Management in Singapore.  — Ankur Banerjee, Faith Hung, Jihoon Lee and Hyun Joo Jin and Summer Zhen, (c) 2026 Reuters