Taiwan emerges as the stronger AI trade bet over South Korea

South Korea and Taiwan spent this year at the center of the global AI trade. As equity investors head into the final weeks of a pivotal year, Taiwan is emerging as the stronger bet of the two, according to Bloomberg.

The numbers behind the AI export boom

In the first half of 2026, South Korea exported $496.3 billion in goods. Taiwan shipped $416.6 billion. Both topped Japan’s $384.4 billion, marking the first time either economy has outsold Japan on total exports.

Integrated circuits made up approximately 30% of total exports for both South Korea and Taiwan. AI chips and related equipment now account for about 80% of Taiwan’s exports and over 40% of South Korea’s. That share has more than doubled from two years earlier.

In August 2025, Taiwan posted monthly exports of $58.49 billion, a one-time lead over South Korea.

Taiwan’s economy had a breakout year

Taiwan’s real GDP grew 8.63% in 2025. Per-capita GDP rose to approximately $39,477, putting Taiwan ahead of South Korea for the first time in 22 years.

South Korea’s semiconductor exports to Taiwan tripled from 2022 levels to $36.769 billion in 2025. That made Taiwan the No. 2 destination for South Korean chip shipments, with a 19.9% share, passing Vietnam to claim that spot.

The concentration problem

Both economies are leaning heavily on AI-related sectors, while non-AI industries in Taiwan and South Korea have struggled and in many cases contracted. Geopolitical tension adds another layer of risk, and domestic AI infrastructure scaling is an increasingly pressing issue.

What this means for investors

With AI hardware dominating its exports at roughly 80%, Taiwan’s market is close to a direct proxy for global AI capital spending. Bloomberg describes Taiwan as emerging as the stronger bet heading into year end.

South Korea’s export base is larger in absolute terms, and AI-linked goods make up a smaller share of the total at over 40%. The research suggests chipmakers and technology integrators tied to AI infrastructure could see enhanced valuations, and points to semiconductor ETFs as a possible beneficiary as portfolios are reassessed.

Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy.