Taiwan has surpassed the United Kingdom to become the world's fourth-largest equity market, with its stock market now valued at nearly $4.3 trillion, according to Bloomberg data. South Korea is positioned approximately $140 billion away from achieving the same milestone. The tech-heavy Asian markets have significantly outperformed European counterparts over the past seven months, with both Taiwan and South Korea now ranking ahead of Germany and France in global equity rankings. This leadership shift has been further amplified by the Direxion Daily MSCI South Korea Bull 3X Shares (KORU), which has delivered 1,165% returns over the past twelve months, turning a 13% Samsung rally into a ~39% single-day move for the fund.
The market reshuffling is primarily attributed to massive gains in shares of three companies providing essential AI hardware: Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest chip foundry, and South Korea's leading memory makers Samsung Electronics Co. and SK Hynix Inc., as reported by Bloomberg. TSMC shares have climbed more than 40% this year, while the Korean duo have surged more than 80% each. TSMC now ranks among the largest companies globally with a market capitalization of $1.8 trillion, and the Korean pair combined reach $1.5 trillion, surpassing Europe's largest company ASML Holding NV.
China's artificial intelligence boom is gaining momentum with major internet giants leading the charge. Baidu, Alibaba, and Tencent are racing to invest in AI, leveraging their vast user bases and cloud infrastructure. Alibaba's open-source "Qwen" AI models are popular worldwide for their customizability, with the Qwen chatbot mobile app having more than 200 million monthly active users in January, according to AI ranking site AICPB. Tencent, despite being cautious, recently vowed to increase AI investment, with founder Pony Ma calling it "the only field worth investing in." Meanwhile, ByteDance's Doubao chatbot leads China's AI market with over 100 million daily active users, while the company's AI video generator SeeDance 2.0 has raised copyright concerns with its cinematic-looking clips.
Chinese startup DeepSeek has released its newest V4 model on Friday, promising performance similar to leading closed-source models at lower cost. The DeepSeek-V4 features ultra-long context of one million tokens and 1.6 trillion parameters for the Pro version, significantly outperforming other open-source models and only slightly trailing Google's Gemini-Pro-3.1. DeepSeek started as a side project in 2023 and shocked the global AI scene with its "R1" model in January 2025, challenging US dominance and becoming known as the "Sputnik moment" for AI. The startup's open-source approach has galvanized China's AI industry and accelerated global diffusion of Chinese models.
Asia has cemented its central role in the global economy through robust semiconductor exports, with Taiwan's March export orders surging at the fastest pace in 16 years and South Korea's exports rising more than 40% for a second-straight month, both driven by strong chip shipments, according to Bloomberg reports. The semiconductor boom demonstrates the oligopolistic nature of leading-edge manufacturing, with investors recognizing these companies as key suppliers to AI leader Nvidia Corp. South Korea's economy runs on imported energy, making it acutely exposed to Middle East disruptions, with the country importing 70% of its crude and 30% of its gas from the Middle East, all transiting through the Strait of Hormuz.
