3 iShares ETFs to Buy Now as South Korea and Taiwan Soar Past 100% Gains in 2026

North Asian semiconductors are powering the 2026 equity rally, led by Taiwan’s iShares MSCI Taiwan ETF (EWT) up 67% YTD and South Korea’s iShares MSCI South Korea ETF (EWY) up 103% YTD, with the Asia 50 proxy (AIA) up 43%. Taiwan’s IC industry is projected to grow to NT$8.4T (~$271B) in 2026 (+30% vs. 2025), and the AI accelerator capex cycle is cited as the structural driver behind the move. The article highlights concentration differences: EWT is a more TSMC-centric “AI foundry” bet, EWY emphasizes Samsung/SK Hynix memory/HBM exposure, while AIA dilutes chip upside with broader Asia large-cap exposure (including Tencent/Alibaba and regional financials).

Analysis

The cleanest winner is still TSM/TSM-heavy exposure: the market is paying up for whoever sits closest to AI compute bottlenecks, and that usually means foundry margin mix and packaging capacity, not just end-demand. EWY is a more leveraged way to express the same capex cycle through memory/HBM, but it is also the first place sentiment can snap if DRAM pricing or GPU build plans soften; that makes it a higher-beta trade than the headline returns suggest. AIA is the most diluted expression and likely becomes a relative loser if the market keeps rewarding “pure exposure” over diversification.

Near term, the tape is being driven by momentum and portfolio crowding, so the next catalyst is not macro but earnings/guidance from TSM, Samsung, SK Hynix, NVDA, and AMD over the next 1-3 months. The key risk is that the market is already discounting a prolonged AI capex supercycle; any pause in hyperscaler spending, inventory normalization, or FX strength in KRW/TWD could compress the multiple even if fundamentals remain decent. Over 6-18 months, the bigger reversal risk is geopolitical: Taiwan headline risk and export-control tightening can hit multiples before they hit reported numbers.

Contrarian view: this is less a broad EM call than a concentrated factor trade in a handful of semi names, and the crowd may be underestimating how much of the ETF performance is already embedded in prices. EWY’s move looks more stretched than EWT’s because memory is more cyclical and the fund’s volatility is much higher, so chasing here has worse asymmetry unless next-quarter pricing data re-accelerates. If the consensus is wrong, it will be because foundry scarcity persists longer than expected while memory stays tight enough to sustain HBM pricing; if not, the first sign will be softer order commentary and a break in TSM/SK Hynix relative strength.

Key Decisions for Investors

• Long EWT vs. short AIA for the next 1-3 months: prefer the purer foundry exposure over the diluted basket; thesis fails if TSM guidance or AI capex commentary rolls over.
• Fade extended EWY strength on rallies: use call spreads or a tactical short only if Samsung/SK Hynix commentary shows memory ASP stabilization rather than renewed upside; stop if EWY reclaims the prior breakout high on volume.
• Pair trade: long TSM / short AIA to isolate the highest-quality AI bottleneck winner versus the broader Asia basket; best entry is on any post-earnings pullback in TSM, not after another momentum leg.
• Watch NVDA and AMD capex-demand signals into the next earnings cycle: if hyperscaler spending guides down, reduce exposure across EWT/EWY immediately because the ETF bid is mostly flow-driven, not valuation-supported.
• If you need a more conservative structure, hold AIA only as a small satellite rather than core; it has less upside torque and more policy drag if China/HK sentiment weakens.