Global trade in AI-enabling products approached $4 trillion last year, with Asia contributing roughly two-thirds of that total, according to a recent report by Allianz Trade. These products include semiconductors, data storage servers, and cooling systems, reflecting the expanding infrastructure supporting artificial intelligence technologies.

Direct investment in AI, encompassing software, services, and infrastructure, is projected to reach $2.6 trillion this year—an increase of 47 percent over 2025—and is forecasted to climb to about $3.5 trillion in 2025, according to market analyst Gartner.

Nvidia’s Chief Executive Jensen Huang recently concluded an 18-day trip to Taiwan and South Korea to deepen business ties amid growing demand for AI-related technology. In Taipei, he announced plans to invest $50 billion annually in Taiwan, which he described as the "epicentre of the AI revolution." While in Seoul, Huang signed agreements with local companies in areas including robotics, memory chips, and AI, underscoring the strategic partnerships shaping the sector’s growth in Asia.

Despite a significant dip in South Korea’s Kospi index on June 8—triggered by a U.S. sell-off in chip shares including Nvidia’s—Huang downplayed the impact, suggesting investors view lower prices as an opportunity to buy.

The rising stock market and booming semiconductor sectors have spurred widespread retail investor activity across the region. In Taiwan, more than 80 percent of people in some social circles, including young newcomers like Ms. Na, are now active in investing. Many retail investors, buoyed by strong returns, are using gains to fund purchases ranging from luxury goods to real estate. Yeh Lun-hao, a 37-year-old surface agent in Taiwan, reported allocating over half of his monthly earnings to chip- and AI-related stocks, leading to a quadrupling in the value of his investments and enabling him to buy a four-bedroom apartment.

Taiwan Semiconductor Manufacturing Company (TSMC) has been a central driver of Taiwan’s market surge. Last year, it accounted for more than 90 percent of advanced chip manufacturing revenue globally. With a market capitalization exceeding $2.2 trillion—larger than Tesla or Meta—TSMC represents over 41 percent of Taiwan’s main stock index. Its shares have more than doubled over the past year, contributing to Taiwan’s outperformance compared to major markets such as France, the UK, and India. Higher pay at TSMC has also intensified talent competition in Taiwan, with starting salaries for engineers reportedly three times higher than comparable roles elsewhere.

In South Korea, semiconductor giants Samsung and SK Hynix—leaders in memory chip production essential for AI computation—have each surpassed trillion-dollar valuations and represent more than half of the Kospi composite index. The Kospi was the best-performing global stock index last year and continues to lead this year. Retail investors like primary school teacher Choi Sung-ho have seen portfolios grow fivefold over the past year, with increased consumer spending on luxury items noted alongside rising wealth.

South Korea has also seen significant growth in youth participation in stock trading. More than 180,000 brokerage accounts for individuals under 18 were opened in the first quarter of the year, often with parental consent, supported by brokerage promotions targeting high school students. Influencers offering financial advice on platforms like YouTube have contributed to popular interest in the stock market.

Japan’s market has also reflected the AI boom, with SoftBank Group briefly overtaking Toyota Motor as the country’s most valuable company, driven by investments in AI ventures including OpenAI and data centers. This leadership was short-lived as memory-chip maker Kioxia took the top spot recently, its stock surging from about $14 a year ago to around $600. Other companies benefiting from the AI expansion include Toto, a producer of high-tech ceramics used in semiconductor manufacturing, and Ajinomoto, which manufactures insulating films for AI chips.

While Japanese interest in semiconductor stocks is rising, some younger potential investors, such as semiconductor engineering students like Ryoki Noa, remain cautious, preferring to wait until reaching a stable income before entering the market.

Overall, Asia’s semiconductor and AI sectors are fueling robust economic activity, marked by substantial corporate investments, record stock performance, and expanding retail investor enthusiasm, reflecting the region’s integral role in the global AI supply chain.