SEOUL, October 21 (AJP) — Chip powerhouses South Korea and Taiwan have been enjoying a bumper harvest, but their stock and currency markets have shared unevenly in the bounty in the second half.
Samsung Electronics and SK hynix, which powered a stock-buying frenzy that nearly doubled the KOSPI earlier this year, have surrendered much of their gains. The Korean benchmark’s remaining advance is now roughly half Taiwan’s 60-percent surge.
In the currency market, however, Korea has pulled ahead.
The won has outpaced the Taiwan dollar since August as back-to-back Korean rate hikes coincided with exporter dollar selling. Taiwan held rates steady, while its exporters kept most of their foreign-currency proceeds unconverted.
The won strengthened 2.9 won to close at 1,325.2 per dollar on Wednesday, extending its advance from 1,328.1 in the previous session.
Using Tuesday’s closes for both currencies, the dollar-won rate had fallen 6.1 percent from about 1,414.5 on Aug. 6. Over the same period, the U.S. dollar rose 1.1 percent against the Taiwan dollar, from NT$32.261 to NT$32.617.
The August starting point excludes most of the won’s initial recovery from its unusually weak July level, showing that its outperformance extends beyond that early rebound.
Measured by changes in their U.S. dollar value, the won had gained about 8.4 percent since the end of 2025 through Tuesday, while the Taiwan dollar had lost about 3.6 percent.
The Bank of Korea raised its policy rate from 2.50 percent to 3.00 percent through consecutive quarter-point increases in July and August. Taiwan kept its discount rate at 2.00 percent through September despite higher energy costs, doubling Korea’s rate advantage to one percentage point.
Taiwanese exporters received $61.96 billion in foreign-currency export proceeds in September but converted only $1.06 billion, or about 1.7 percent, into Taiwan dollars, according to central bank data cited in the figures. About $60.89 billion remained in foreign currency at receipt.
Those funds can be converted later or used to repay foreign-currency debt, pay for imports and meet other overseas obligations. An export dollar earned, in other words, is not automatically a dollar sold for the local currency.
“Korean exporters now seem to have greater confidence in bringing money back to the won,” ING economists wrote in an October report.
The bank said the Taiwan dollar faced pressure from widening interest-rate differentials with the United States and corporate investment abroad, even as Taiwan’s trade surplus reached new highs.
That distinction matters for two economies among the biggest beneficiaries of the global AI spending binge.
“Heavy overseas investment by residents and foreign selling of domestic equities have recycled much of the export windfall abroad,” MUFG strategist Lee Hardman wrote in a July report. Those flows, he said, had restrained both currencies despite sharply improved external balances.
The two central banks have also drawn different conclusions about how much tightening their economies need.
The BOK said its July increase reflected stronger export- and investment-led growth, above-target inflation and financial stability risks. In August, it argued that another preemptive increase was needed to prevent price pressures from spreading.
Taiwan’s central bank judged inflation to be contained despite rapid economic growth. In September, it raised its 2026 growth forecast to 11.48 percent but projected headline inflation of 2.03 percent this year and 1.83 percent in 2027, supporting its decision to hold rates steady.
The currency contrast is sharper when measured from early July. From July 2 through Tuesday, the dollar-won rate fell 14.6 percent from 1,555.8, while the U.S. dollar rose 2.2 percent against the Taiwan dollar from NT$31.910.
The comparison does not establish that higher rates alone produce a stronger currency. Overseas investment, equity flows, energy bills and expectations for U.S. monetary policy can outweigh their support.
For Korea, however, higher rates and exporter conversions have been pulling in the same direction, helping sustain the won’s recovery even as enthusiasm for its chip stocks has faded.
The BOK is widely expected to hold its policy rate on Thursday. A pause would leave exporter dollar selling and Korea’s external surplus in sharper focus as supports for the won, although the currency’s response will also depend on the bank’s guidance and global market conditions.
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