Foreign investors have swung back toward Taiwan equities in August, buying a net $1.7 billion while pulling $6.2 billion from South Korean stocks, as AI-focused allocations shift after July's severe correction. Data compiled by LSEG and Bloomberg showed overseas investors turned net buyers of Taiwan shares last week, ending a six-week selling streak, while outflows from South Korea extended a retreat that began in June. Analysts linked the divergence to Taiwan's wider presence across wafer foundry, IC design and electronic components, compared with South Korea's heavier reliance on the memory chip cycle and on Samsung Electronics and SK Hynix. Bloomberg data also showed analysts raised forward 12-month earnings estimates by 9.5% for Taiwan-listed companies last month, versus 7.4% for KOSPI constituents, the first time in nearly a year Taiwan's revision momentum has topped South Korea's. Taiwan stocks were up more than 55% year to date as of Aug. 11, ahead of South Korea's roughly 50.58%, after the KOSPI had earlier been Asia's top-performing market and at one point more than doubled. South Korea's higher use of leveraged ETFs and speculative positioning is also seen amplifying volatility. July's turmoil underscored the concentration risk: foreign investors sold a net $22.95 billion of Taiwan stocks and $6.26 billion of South Korean equities, helping drive a $25.48 billion withdrawal from seven major Asian markets even as India drew $2.12 billion and Thailand $1.46 billion. Some investors now see Korean valuations as compelling after the selloff, and Goldman Sachs says the recent pressure looks overdone, but strategists argue the longer-term contest between the two markets will hinge on AI monetization and whether heavy corporate R&D spending produces durable returns.