The Semiconductor Boom Is Starting to Look Like Dutch Disease

Taiwan and Korea are increasingly behaving as leveraged bets on the AI semiconductor cycle, exhibiting symptoms of 'Dutch disease'. The sector now dictates trade balances, growth, and equity market performance, decoupling these nations from traditional geopolitical and energy risks.

Key Takeaways

• 1.Taiwan and Korea have become leveraged macro expressions of the global semiconductor cycle, showing signs of 'Dutch disease' where one sector dominates the economy.
• 2.The semiconductor sector accounts for 20% of Taiwan's GDP, with TSMC alone representing 9%, and the sector consumes 25% of the island's electricity.
• 3.Semiconductors are behaving as a strategic commodity, protecting trade balances in Taiwan and Korea even amidst oil price shocks.

Table of Contents

• Leveraged Semis Countries
• The semiconductor economy
• Semis syndrome
• Parabolic
• The beast
• Oil - no problem
• Inflows Jaws
• South Korean exports
• Hedging semis

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