Foreign investors return to Taiwanese chip stocks more quickly than Korean peers

The Democrats’ sweep of the US midterm elections sent AI stocks tumbling on concerns about tighter regulation. Markets have rallied since then, but unevenly: Asia’s two chipmaking powers are seeing investment flows diverge.

EPFR data show that 30-day rolling inflows into Taiwanese equity funds reached about $35 billion by early November, roughly three times South Korea’s $11 billion. This reflects a relative lead in advanced chipmaking. Korean flows recovered from the outflows seen in September and early October, but remain well below their March peak.

The two markets matter because together they make up about 40% of global emerging-market (GEM) equity funds’ allocations. Such concentration ties GEM funds to the chip cycle: a correction in Seoul or Taipei now hits the whole asset class. Key stock indices are dominated by SK Hynix, Samsung Electronics and TSMC.