The market capitalization gap between South Korea’s Samsung Electronics and Taiwan’s TSMC, leading semiconductor companies, has widened over the past year. While TSMC has benefited from rising expectations in AI, South Korean firms are considered undervalued. Data from the global market capitalization tracking website, CompaniesMarketCap, indicates that as of Jan. 28 TSMC’s market capitalization stood at US$608.15 billion, significantly ahead of Samsung Electronics’ US$364.43 billion by approximately US$243.7 billion. At the end of 2022, TSMC’s market cap was US$386.3 billion, with the gap at just US$93.3 billion, indicating a 2.5 times increase in disparity within about a year. Looking at the year-end market capitalization gap, TSMC has consistently led each year: US$133.8 billion in 2021, US$93.3 billion in 2022, and US$137.8 billion in 2023. Until the end of 2020, Samsung Electronics, with a market cap of US$500.8 billion, was ahead of TSMC’s US$488.1 billion by US$12.7 billion. However, since being overtaken by TSMC in 2020, the Taiwanese company has solidified its lead. The gap between the stock markets of South Korea and Taiwan is also widening. The market capitalization difference between the two countries’ stock markets grew from US$164.059 billion on Jan. 2 to US$277.126 billion on Jan. 23, an increase of about 150 trillion won. Samsung Electronics (20% share) and TSMC (25% share), being the leading stocks in their respective countries, have partially contributed to this widening gap. Since the beginning of the year, Samsung Electronics’ market cap and the KOSPI index have fallen by 9.24% and 6.66%, respectively, while TSMC’s market cap and the Taiwan stock market have risen by 12.75% and 0.36%. Analysts attribute the contrasting fortunes to differing expectations in AI benefits. Kang Daeseok, a researcher at Yuanta Securities, explains, “Taiwan’s stock market was subdued overall last year due to the presidential election, not fully participating in the AI rally. However, a sharp influx of net buying emerged from November last year, reviving the investment spirit in TSMC, despite policy uncertainties.” On the other hand, South Korea’s market cap is closely trailed by Nvidia, representing AI, and has yet to see a significant trickle-down effect. |