Most countries would kill for this problem. Two of them just got it.
South Korea and Taiwan ship so many AI chips that both could hike rates this year. That's the call from a Goldman Sachs team led by Andrew Tilton.
Goldman has a name for it: the "AI super surplus."
Taiwan's trade surplus could top 20% of GDP this year. South Korea's could clear 10%. Most countries run in the low single digits.
The driver is one thing: chips. Both make the chips that run AI data centers. Goldman calls it the strongest tech cycle on record.
Big surpluses push the local money up. That tightens money on its own.
The chip boom does the rest. Demand keeps rising as data centers race to add AI power.
We unpack what these macro shifts mean for your money every morning in Market Briefs. Five minutes a day, plus a free 45-minute masterclass when you join.
Goldman sees two hikes from the Bank of Korea, one in Q3 and one in Q4. Taiwan's central bank is set for two smaller hikes, one in Q2 and one in Q4.
Growth backs it up. Taiwan's GDP is set to climb nearly 10% this year. South Korea will bounce to 2.5% growth, more than double last year.
For Korea, this would be the first hike in years. For Taiwan, it would mark a clear shift.
Both countries get most of their energy from the Middle East. That would normally hurt them when oil jumps.
Goldman ran the numbers anyway. The chip wave is so big it dwarfs whatever oil does.
For investors, that's a real signal. The AI trade is no longer just a US tech story. It moves rates in Asia now.
Higher rates in Korea and Taiwan tend to push their money up. That can shift cash flows across emerging markets. It can also lift their chip stocks even more.
The Korea-Taiwan story is also a read on the US AI trade. If chip exports stay this hot, US AI demand is still surging.
Nvidia, AMD, and Broadcom all rely on the same supply chain. A stronger surplus in Taiwan is a tell that orders are still coming in.
For Asia-focused funds, the picture is even cleaner. Korea's KOSPI and Taiwan's TAIEX have already had a strong year. A Goldman-style read on rate hikes could keep flows coming in.
The iShares MSCI Taiwan ETF (EWT) and the iShares MSCI South Korea ETF (EWY) are the most direct ways to play it. Both have been hot. A hawkish central bank could add more fuel.
Watch the meeting dates. If either bank moves early, the AI boom is even hotter than Goldman thinks.
The yen and yuan are also worth a look. Other Asian currencies could move with Korea and Taiwan as flows shift.
Korea's first hike is set for Q3. Taiwan could move as soon as next quarter.
Sign up for Market Briefs for the daily read. You'll also get a free course on finding investments thrown in.
