Artificial intelligence demand is redrawing the global stock market hierarchy, elevating economies at the center of the semiconductor supply chain. Taiwan has overtaken Canada to secure the world's sixth-largest stock market position, according to HSBC data tracking global equity-market capitalization rankings. South Korea concurrently advanced past the U.K. to claim eighth place.
The magnitude of these shifts is visible in the raw numbers. Taiwan's stock market has grown from approximately $500 billion in 2004 (ranked 12th globally) to $4.7 trillion today. South Korea's market expanded from $400 billion in 2004 (13th place) to $4.4 trillion. The top five remain the U.S. China, Japan, Hong Kong and India.
Global equity reshuffles occur roughly once per market cycle, typically driven by a domestic boom, major initial public offering, or sustained outperformance over years, according to Billy Leung, global investment strategist at Global X ETFs. This rally differs fundamentally: it is driven by extraordinary concentration of capital into a limited number of AI-linked companies.
The concentration is extreme. Taiwan Semiconductor Manufacturing Co. (TSMC) alone accounts for more than 40 percent of Taiwan's total market capitalization. In South Korea, Samsung Electronics and SK Hynix collectively represent 42.2 percent of the Kospi index—a record level. June Chua, head of Asia equities at Manulife Investment Management, said both indices have effectively become proxies for the AI and semiconductor sectors.
Tim Moe, Goldman Sachs' chief regional equity strategist for Asia-Pacific, affirmed that the AI hardware theme is propelling these markets. He explained that the transition toward agentic AI has triggered an explosion in token demand, creating a supply shortage that grants chipmakers extraordinary pricing power.
This concentrated rally carries structural vulnerabilities. South Korean equities experienced a sharp drop last week following foreign investors' sale of approximately $13 billion worth of local stocks. Samsung Electronics, a heavyweight in the Kospi, whipsawed as investors monitored ongoing labor negotiations and the potential for a strike. Raman Aylur Subramanian, MSCI's global head of index regional research solutions, noted that the AI-driven repricing converged with geopolitical shocks and shifting interest-rate expectations during the first quarter of 2026, creating disruptive conditions for global markets and multi-asset portfolios.
