Asian Chipmakers Rally on AI Optimism and Fed Rate Cut Expectations

Stocks in Japan, South Korea, and Taiwan surged to record highs as investor confidence grew around artificial intelligence advancements and anticipated U.S. Federal Reserve rate cuts. Taiwan Semiconductor Manufacturing Company (TSM) and SK Hynix, a key Nvidia partner, led gains, with the latter jumping 7% after reporting progress in AI chip development. The rally extended across regional semiconductor peers, fueled by a weaker U.S. dollar and robust foreign inflows.

Policy tailwinds added momentum. South Korea's amended Commercial Code clarified directors' duties to shareholders, inviting greater foreign participation. Japan's corporate reforms and diversification away from U.S. tariffs further attracted capital. The August U.S. jobs report, signaling slower growth, bolstered bets on imminent Fed easing—amplifying returns for international investors in Asian equities.