Driven by AI demand, Taiwan's and South Korea's stock markets posted record rallies in 2026, even as retail investors' borrowing via margin loans swelled to all-time highs, raising concerns about how sustainable the gains are.
2026 · AI Chip Rally
Taiwan & Korea Ride the AI-Chip Boom — on Record Borrowed Money
Surging demand for generative-AI chips has powered record equity rallies, lifting both markets up the global rankings — but retail margin debt at all-time highs is raising hard questions about how long the gains can last.
~+90%
Korea KOSPI gain
~+50%
Taiwan Taiex gain
$720B
2026 hyperscaler AI
Margin Debt: 2025 Growth, By Market
Korean retail "ant investors" ramped up borrowed money far faster than any peer — balances topped 60 trillion won (~$39B), a record.
A Few AI Names Carry the Whole Market
IT-sector weighting in each index — the rallies rest on a heavy concentration in the AI supply chain.
Taiwan · IT weight
~79%
TSMC alone ≈ 40% of the market
Korea · IT weight
~52%
Samsung + SK Hynix ≈ 42% of KOSPI
The Bull Case
$720B hyperscaler AI capex in 2026 keeps chip & HBM demand surging
Korea's KOSPI at 8.1x forward P/E sits below its 5-yr average (10.1x)
Longer-term investors bet AI capital spending keeps rising
The Caution
Margin debt at record highs in both Korea and Taiwan
New 2x single-stock leveraged ETFs fuel FOMO and volatility
Any drop in chip demand could force borrowed-money investors to sell en masse
The Open Question
Whether AI infrastructure investment keeps growing is the key to whether these historic, leverage-fuelled rallies endure — the Bank of Korea has already flagged record leverage and the concentration risk of AI dependence.
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