AI trade shifts emerging market dominance to South Korea and Taiwan
South Korea and Taiwan now account for over half of the MSCI Emerging Markets Index, overtaking China and India. As of last month, South Korea's weight was nearly 24%, Taiwan's 27%, and India's 11%, while China's fell below 20%. The shift is driven by AI-fueled demand for semiconductors, with Taiwan's economy projected to grow nearly 10% this year and South Korea's semiconductor exports surging 180% in the first three weeks of the month. South Korean stocks are up 61% and Taiwanese stocks 53% year-to-date. Carmignac notes that AI in emerging markets is already embedded in the real economy, unlike in developed markets.
Key facts
- South Korea and Taiwan now make up over 50% of the MSCI Emerging Markets Index.
- South Korea's weight in the index is nearly 24%, four percentage points more than China.
- Taiwan's weight is 27%, double India's 11%.
- China's economy is almost 10 times the size of South Korea's.
- Taiwan's statistics agency predicts nearly 10% economic growth this year due to AI-driven exports.
- South Korea's semiconductor exports rose 180% year-on-year in the first three weeks of the month.
- South Korean stocks are up 61% and Taiwanese stocks 53% year-to-date.
- Carmignac stated AI in emerging markets is already embedded in the real economy.
Entities
Institutions
- MSCI
- Carmignac
Locations
- South Korea
- Taiwan
- China
- India