The artificial intelligence rally resumed in August after the summer correction. The Philadelphia Stock Exchange Semiconductor Index, the SOX, has risen almost 19% from its late-July lows. The rebound, however, is not limited to Wall Street, because the strongest-rising markets are in Asia. Two exchanges concentrate the AI bet more than any US market, turning attention toward Seoul and Taipei.

AI Trade Resumes Between South Korea and Taipei

The Korean Kospi has gained 65.18% since the beginning of 2026 and reflects the AI rally better than any other market index. The driving force consists of just two companies, Samsung Electronics and SK Hynix, which together now account for half of the index.

Both produce memory, with SK Hynix dominating high-bandwidth memory. Since January, SK Hynix has gained 142.98% and Samsung 128.37%, the two strongest contributors to the Korean market. At its current level, the Kospi nevertheless remains approximately 26% below its all-time high of 9,385 points reached at the end of June. From its late-July lows, by contrast, the recovery amounts to approximately 22%. When the Kospi moves, those watching it are reading almost entirely the price of these two stocks, not the performance of a broad market.

Taiwan and the TSMC Colossus

Taiwan’s stock market faces the same issues, with the TAIEX up 57.88% since the beginning of 2026. Here, concentration is even more extreme, because a single stock, TSMC, accounts for more than 40% of the entire index. TSMC is the foundry that physically manufactures the most advanced chips for Nvidia and Apple.

One detail, however, overturns the simplest interpretation: since January, TSMC has gained 51.10%, less than the index. Taiwan’s 2026 rally has therefore been broader, with other chip and server manufacturers pushing the market higher beyond TSMC alone. At present, the TAIEX remains close to its record, approximately 5% below its all-time high.

The Common Thread Between Seoul and Taipei

The thread linking Seoul and Taipei is the same vulnerability: an index dependent on very few companies. Buying these markets means buying one or two companies, with the rest of the market counting for little. The practical consequence is high volatility, because a plunge in one of these dominant stocks pulls the entire index down in a chain reaction.

According to Goldman Sachs, a major US investment bank, the combined weight of the two Korean stocks is approaching critical levels. A further increase in their market capitalisation and weighting risks triggering forced selling by foreign funds bound by diversification rules. The Kospi has already triggered automatic trading halts several times in 2026, particularly last July.

Wall Street Remains More Diversified

The United States, identified by everyone as the epicentre, is in fact the least concentrated market, partly because it is the largest. On the Nasdaq, the largest stock, Nvidia, accounts for approximately 12.70%, while Apple represents approximately 11%. The first two names together account for roughly one-fifth of the Nasdaq, whereas in Taipei a single stock accounts for more than 40% and in Seoul two stocks represent half of the market.

The Nasdaq also covers software, internet services and consumer sectors, in addition to chips alone. Asia represents those who manufacture the chips, while America represents those who buy them and build services on top of them. For this reason, the real risk of the AI rally lies more in Seoul and Taipei than in New York.