EWT iShares MSCI Taiwan ETF : Bullish and Bearish Analyst Opinions

EM is an AI story, bullish on EM.

Taiwan and Korea well-positioned for A.I.

Upgraded EM to overweight.

Long tech-heavy Asian markets on AI demand.

Bullish on global equities, especially Korea and Taiwan.

Taiwan and South Korea semiconductor stocks attractive.

The author posits that the US is strategically de-prioritizing Taiwan, which significantly increases the risk of a Chinese military move and is thus bearish for Taiwanese assets.

A projection from a Taiwanese industry leader for significant growth in assets under management suggests a long-term tailwind for the country's financial markets.

Other Asian stock markets might particularly suffer. Korea, Taiwan have done really well. India hasn't been a particular performer recently, but it's getting hit in the trade as well. Countries like Korea and Taiwan are heavily dependent on imported energy to run their manufacturing and technology sectors. Because their stock markets have recently outperformed, they have high valuations with significant room to fall when energy input costs spike and global trade is disrupted. SHORT. High-flying, energy-import-dependent export economies will face severe margin compression and capital flight. Global demand for semiconductors and tech hardware remains so inelastic that these countries can easily pass the increased energy costs onto consumers without losing volume.

"The key drivers of why Korea and Taiwan are not doing so well is not because the economy is going into recession. It is because they will be the beneficiaries of capex spending. The hyperscalers in the US have committed a large amount of terms of capex spend. That's not going to go away, despite the war." North Asian markets have sold off due to cyclical fears and their vulnerability as oil importers. However, their core earnings driver is US big tech AI infrastructure spending, which is completely insulated from Middle East conflicts. This creates a valuation mismatch where investors can buy structural AI growth at a cyclical discount. LONG. The selloff in Korean and Taiwanese tech is an oversold buying opportunity backed by unstoppable structural AI capex. A broader global recession could eventually force US hyperscalers to cut their capex budgets, directly hitting Asian semiconductor and memory exports.

Those countries that are most dependent on oil imports, Taiwan, South Korea, they are also the most heavy markets. Tech stocks leading declines, and you are looking at these big names down about 10% or so. Asian manufacturing and semiconductor hubs are highly dependent on imported energy. A sustained spike in crude oil prices acts as a massive tax on these economies, crushing corporate margins and consumer spending. Furthermore, energy-intensive sectors like data centers and chip foundries will face severe operational cost headwinds. SHORT. Export-driven, energy-importing Asian economies and their flagship tech manufacturers will suffer severe margin compression. Central bank interventions, government stabilization funds (like the one mentioned in South Korea), or a rapid drop in energy prices could trigger a sharp short-covering rally.

Asia gets more than 70% of our energy and oil from that Middle Eastern region. The big chipmakers in Korea and in Taiwan are seeing the biggest outflows, dragging markets down 4 to 8%. Tech-heavy, export-driven economies like Taiwan and South Korea are highly vulnerable to energy price shocks. A 10% increase in oil prices widens Asia's current account deficits, compressing corporate margins and forcing foreign investors to liquidate their most liquid, profitable tech holdings. SHORT. High energy input costs and currency depreciation will severely impact the profitability and valuation multiples of Asian semiconductor giants. Government interventions (like South Korea's proposed oil price caps or market stabilization funds) could artificially support equity prices.

South Korea and Taiwan rely heavily on LNG from the Gulf (Qatar/UAE). Taiwan has phased out nuclear and restricted utility-scale solar; Korea has limited storage (less than 2 months). These economies are the "chip fabs" of the world but have fragile power grids. A prolonged disruption in the Strait of Hormuz threatens their energy security more acutely than other nations, creating systemic risk for their broader equity markets. Short South Korea (EWY) and Taiwan (EWT) ETFs as a hedge against energy insecurity. The conflict resolves quickly, restoring normal LNG shipping routes.

Despite being major oil importers, Korea and Taiwan are currently the "two best markets in the world." Investors are prioritizing the AI/Tech hardware cycle (which drives these economies) over the energy input cost shock. The market positioning suggests resilience in high-tech manufacturing hubs. Long Korea (EWY) and Taiwan (EWT) as they are attracting capital flight from other EMs. If oil prices stay elevated for too long, the current account deficits in these nations will eventually erode currency and equity value.

Chinoy highlights that Korea (EWY) and Taiwan (EWT) are in "much better shape" regarding current accounts due to "surging tech exports" and large surpluses. In an oil shock, countries with current account deficits usually suffer currency depreciation. However, Korea and Taiwan have massive tech-export buffers that insulate them from rising energy import costs. They are the "safe havens" within the Asian basket compared to deficit runners. LONG EWY and EWT as relative strength plays against broader EM weakness. A global recession driven by high oil prices would eventually hurt demand for tech exports.

The speaker uses a "barbell approach," balancing LATAM with exposure to Korea and Taiwan, citing the "AI ecosystem" (memory/semis) and "capital market reforms" (specifically Korea). While cautious on pure momentum, the structural tailwinds of the memory cycle and governance reforms (the "Korea Discount" narrowing) make these markets attractive on a relative value basis compared to US Tech. LONG Korea and Taiwan ETFs to capture the AI hardware cycle and governance improvements. Cyclical downturn in memory chips or geopolitical tensions in the Taiwan Strait.

The author forecasts a strong February trade surplus for Taiwan, suggesting the number could surprise to the upside and be bullish for the Taiwanese economy.

A basket of Taiwanese SRAM suppliers are rumored beneficiaries of NVIDIA's new LPU, which could drive demand for their products as it bypasses traditional HBM bottlenecks.

"We are very bullish scenario here in Asia today. Once again, huge amounts of money flowing into Asia, particularly targeting Taiwan and Korean equities." Direct institutional capital flows are the primary driver of asset prices. The speaker explicitly identifies Taiwan and Korea as the targets of these "huge amounts of money," which implies continued upside for these equity markets. Long Taiwan (EWT) and South Korea (EWY) equities. Reversal of capital flows or geopolitical tensions in the region.

"Wall Street's tech rebound surges, sending markets in South Korea and Taiwan to fresh records... Supported also by the deal between AMD and Meta." The AMD/Meta deal validates the "alternative infrastructure" thesis, proving buyers aren't solely reliant on Nvidia. This broadens the rally from a single stock (NVDA) to the wider hardware ecosystem (Korea/Taiwan memory and chip supply chain). Anthropic's partnership stance reduces regulatory/existential fear, greenlighting continued CapEx. LONG Asia Tech indices and US hardware alternatives. Re-acceleration of US inflation forcing Fed tightening; disappointment in Nvidia earnings (mentioned as a risk event).

Asian markets (China, Taiwan, Korea) are rallying despite the new 10% US tariffs. Investors see the 10% rate as "clarity" compared to previous uncertainty. The "AI Risk" report that crushed US software stocks is viewed differently in Asia. Asian tech is seen as "upstream" (infrastructure, materials, picks and shovels) which enables AI, rather than "downstream" apps that AI disrupts. Additionally, China has already diversified trade, making the tariff impact less severe than feared. LONG Asian hardware and infrastructure plays. Trump follows through on the threat to raise tariffs from 10% to 15% or higher immediately.

The Supreme Court ruling limits Trump's ability to impose arbitrary reciprocal tariffs, capping the new global tariff at 15% under Section 122. Asian markets (Korea +1.5%, Taiwan up) are rallying. This removes the "tail risk" of 50-100% tariffs on Asian exporters. The 15% rate is viewed as manageable and provides certainty. Furthermore, demand for AI chips remains insatiable, and these companies have pricing power to pass on the 15% cost. LONG Asian Tech Hardware. The relief rally combined with fundamental AI demand makes this the top trade. Trump finds a new legal avenue for higher tariffs after the 150-day Section 122 period expires. UUP / USD - SHORT Speaker: Mark Cranfield / Jack McIntyre Thesis: The US Dollar is trading softer following the Supreme Court decision. Jack McIntyre notes Brandywine is short USD and expects currency to be a primary return driver. The SCOTUS ruling strips the US of its "tariff cudgel," reducing US geopolitical leverage. Combined with a potential pivot to "balance of payments" tariffs (which implies the US has a deficit problem), the narrative shifts away from US exceptionalism, prompting capital flight to cheaper jurisdictions. SHORT USD. A global recession triggers a "flight to safety" back into the Dollar. GLD / SLV - LONG Speaker: Mark Cranfield Thesis: Gold is up ~2% and Silver is rallying. Traders have cut net long positions significantly in recent weeks, cleaning up positioning. The combination of a weaker US Dollar (due to the tariff ruling) and lingering geopolitical risks (Iran tensions, though secondary to tariffs) creates a perfect storm for precious metals. The "pain threshold" for tariffs is lower, meaning the Fed may not need to be as hawkish to combat tariff-induced inflation. LONG Precious Metals. A sudden spike in US real yields or a resolution to geopolitical tensions. IGV / SOFTWARE SECTOR - AVOID / SHORT Speaker: Helen Zhu Thesis: Zhu states the "AI scare trade" (selling software) is "totally justified." Companies that traded at high Price-to-Sales multiples are seeing their "terminal value" questioned. AI is disrupting the "moats" of legacy SaaS and business services. If AI can replace 80% of a service cheaper and faster, the visibility of 3-5 year software contracts evaporates. Multiples must reset lower to reflect this existential risk. AVOID / SHORT High-Multiple Software. AI adoption slows down, proving legacy software moats are more durable than expected. LATIN AMERICAN ASSETS / EMERGING MARKETS - LONG Speaker: Jack McIntyre Thesis: Brandywine Global is allocating to Latin America, citing attractive real yields and better balance sheets compared to the US. With the US Dollar weakening and US Treasuries facing supply/inflation headwinds from tariffs, capital is seeking yield in regions with positive real rates. Latin America benefits from the "weak dollar" trend. LONG Latin American Debt/Equities. A resurgence of the US Dollar or political instability in LatAm. TLT / US TREASURIES - AVOID Speaker: Jack McIntyre Thesis: McIntyre has cut net US Treasury holdings, exiting 10-year positions. He sees yields moving to the 4.5% range. Tariffs (even at 15%) are inflationary and reduce real growth, creating a stagflationary backdrop. Additionally, "bond vigilantes" may react negatively to the reduced revenue/efficiency of the US economy under a protectionist regime. AVOID US Duration. A severe US recession prompts the Fed to cut rates aggressively, sending yields lower. HONG KONG / CHINA PROPERTY SECTOR - LONG Speaker: Yvonne Man / David Ingles Thesis: The Hang Seng Property Index has seen 9 straight weeks of gains (longest run since 2003). JP Morgan upgraded the sector to overweight. There is "FOMO sentiment" from mainland Chinese buyers diversifying wealth into Hong Kong assets. The removal of extreme tariff risks (fentanyl-related tariffs gone, replaced by flat 15%) improves the macro outlook for Chinese wealth preservation. LONG Hong Kong Developers/REITs. Regulatory crackdowns from Beijing or a resurgence of US-China tensions post-summit. TEXTILES & LEATHER / CONSUMER DISCRETIONARY (China Exporters) - LONG Speaker: Yvonne Man / Matt Priest Thesis: "Shadow International" (Shenzhou International) is up 4%. Matt Priest notes that a flat 15% tariff is better than the chaos of reciprocal levies (which were 20-100%). The market feared a trade war escalation with tariffs hitting 60-100%. A capped 15% rate is a "relief" for exporters who have already diversified supply chains or have pricing power. The uncertainty premium is being priced out. LONG Major Asian Exporters. Trump uses other tools (Section 301/232) to target specific sectors after the 150-day window.

US trade deficit with China is at a 20-year low, while deficits with Mexico, Vietnam, and Taiwan (record high) are surging. Tariffs are not stopping imports; they are re-routing them. Capital and manufacturing capacity are physically moving to these "connector" economies to bypass US-China friction. These countries are the structural winners of US trade policy. LONG Mexico, Vietnam, and Taiwan equities/currency. The US administration expanding tariffs to include these trans-shipment hubs.

Koesterich points to "better value opportunities outside the US," specifically citing Japan (fiscal stimulus) and Korea/Taiwan (semiconductor rally). Skelly mentions the "global reflation trade" where the US has ceded leadership to these regions. While the US struggles with high valuations and AI doubts, Asian markets offer the same tech/semi exposure (AI hardware) at lower multiples, plus idiosyncratic catalysts like Japan's corporate governance/fiscal shifts. LONG Asian developed/emerging markets. Global trade wars or US dollar strength reversing.

BofA raised Taiwan's 2026 GDP growth forecast from 4.5% to 8%. Taiwan is riding a "once in a generation" CapEx supercycle. TSMC's monthly sales track closely with this CapEx boom. The US-Taiwan trade deal removes policy overhang for the tech sector. LONG. The economy is "supercharged" by external demand for AI and hardware. A "K-shaped" economy where non-tech sectors falter could force the central bank into a difficult policy dilemma; currency swings.

1. THE FACT: Japan's demographics are leading to economic stagnation, debt overhang, and millions of worthless properties. Similar demographic trends are observed in other Asian countries. 2. THE BRIDGE: Worsening demographics (low birth rates, aging populations) across Asia will lead to reduced labor forces, lower consumption, increased social welfare burdens, and potentially deflationary pressures, mirroring Japan's long-term economic struggles. This will negatively impact economic growth and asset values in the region. 3. THE VERDICT: Deteriorating demographics across Asia, similar to Japan's, suggest long-term economic stagnation and a short opportunity in the region.

1. THE FACT: "Taiwan is next" 2. THE BRIDGE: This implies a geopolitical event (e.g., invasion) that would negatively impact Taiwan's economy and assets. 3. THE VERDICT: Short Taiwan assets due to impending geopolitical risk.