Semis are the “new oil.”

That’s according to a PM who spoke last week to Bloomberg for a piece documenting the assurgent character of chip-heavy equity benchmarks in Taiwan and South Korea.

The Kospi hit another new record on Monday north of 6,600. If you bought the South Korean benchmark at the March 2020 lows (i.e., at the depths of the original COVID panic) and held it, you’d be up — drumroll — more than 350%.

The figure above’s astounding. The Kospi’s up more than 150% on a YoY basis following a 30% move off the late-March, Iran-war lows.

That’s the kind of statistic that’s hard to internalize on a quick read, so do yourself a favor: Take a moment to “translate” it into a comparable move on the S&P. This time last year, we were looking at SPX ~5520. A Kospi-like gain would have the US benchmark at 14k right now.

In Taiwan, the one-year gain for the benchmark’s not quite as dramatic, but it’s still staggering: Local shares have doubled and, thanks to TSMC’s swollen market cap, are now worth $4.3 trillion, more than the UK market. The same’s (almost) true of South Korean stocks. Both markets, Bloomberg observed in the linked article mentioned above, are more valuable than German and French equities.

Lamentations for “extreme concentration” and narrow breadth are a mainstay of bear narratives for US shares. 44% of S&P 500 market cap reports earnings this week, an enormous figure that underscores just how concentrated the market leadership is — Alphabet, Amazon, Apple, Meta and Microsoft all report in the days ahead. But it’s nothing compared to South Korea and Taiwan.

The figure above shows you the YTD gains for Samsung and SK Hynix which, between them, comprise more than 40% of South Korean market cap. TSMC is 40% of the Taiex by itself.

Consider this: SK Hynix is up nearly 700% (!) since the “Liberation Day” lows, and an unfathomable 1,700% since mid-March of 2020. Those figures are ~300% and 425% for Samsung.

Coming back to the US, SocGen’s Manish Kabra on Monday noted that semis currently account for 84% of total 2026 market cap gains and around three-quarters of US Tech EPS growth.

The Tech growth premium “collapses” if you strip out semis, Kabra went on. “Once semis are excluded, Tech EPS growth falls back to roughly market level, with S&P 500 EPS growth dropping to ~12% on an ex-semis basis.”

As discussed here at some length over the weekend, the semi rally’s almost surely over-cooked on a near-term basis. The SOX hasn’t traded this expensive to its 200-day since the dot-com boom, and after a near 40% run in April, the gauge’s 14-day RSI is ~85.

But — and this brings us full circle — if semis are indeed “the new oil,” I suppose “bubble” isn’t the right word. Rather, in the AI era, chips are best conceived as a scarce resource in an increasingly fraught geopolitical environment.

Fortunately for the US, and for free society more generally, South Korea doesn’t share a border with a nuclear-armed hermit kingdom that’s one high-level government health crisis away from being run by a 13-year-old with help from a queen regent. And Taiwan isn’t the subject of a totalitarian dictator’s reunification obsession.