Taiwan, South Korean stocks at record highs on TSMC-driven AI rally

• TSMC profit exceeds forecasts, projects robust annual growth
• Taiwan breezes past key 31,000 mark for first time
• U.S., Taiwan clinch semiconductor-focused trade deal
• South Korean equities gain for 11th consecutive session

By Nichiket Sunil and Shivangi Lahiri

Jan 16 (Reuters) - Equities in Taiwan and South Korea hit record levels on Friday as optimism over a sustained global AI rally surged following strong profits from chipmaker TSMC, with a U.S.-Taiwan trade deal further boosting risk-on sentiment.

The MSCI indexes of EM Asia equities .MIMS00000PUS and global EM equities .MSCIEF climbed around 0.7% each to notch all-time highs. A gauge tracking tech stocks in emerging markets .MIMS0IT00PUS jumped more than 2% to a record peak.

In East Asia, shares in Taipei .TWII gained as much as 2% to cross the 31,000-mark for the first time.

Shares in TSMC 2330.TW advanced 3% to a record peak after the top contract chipmaker reported forecast-smashing 35% growth in quarterly profits and also projected a 30% growth in 2026 revenue in U.S. dollar terms. The outlook bolstered views that the global AI rally still had significant room to run.

The sentiment was further aided by Taiwan clinching a trade deal with the United States, which reduces tariffs on many of its exports and encourages new investments in the U.S. technology industry.

"Solid results from TSMC stabilized the rotation out of tech without undermining the bid for cyclicals that has characterized the start of the year's trade," said Kyle Rodda, senior financial market analyst at Capital.com.

"The results implied a continued strong demand for chips and a robust sales pipeline, reflecting well on the overall artificial intelligence build-out."

In South Korea, the tech-heavy KOSPI index .KS11 advanced for an 11th consecutive session to scale a record peak. Chipmakers Samsung Electronics 005930.KS and SK Hynix 000660.KS added 3.4% and 0.5%, respectively.

In Southeast Asia, Singapore stocks .STI inched 0.3% higher to an all-time peak of 4,846.650 points, while Thai stocks .SETI edged higher to park at a one-week high.

Shares of Italian Thai Development ITD.BK slumped 5%, extending losses into a fourth consecutive session, after two separate accidents of cranes collapsing at the construction firm's project sites resulted in multiple deaths.

The stock has lost over a quarter of its value in the past four sessions.

Among currencies, the South Korean won KRW=KFTC slipped 0.4% to trade around 1,473 per dollar.

The won has fallen 2.3% so far this year, as ongoing retail outflows weighed on the currency despite signals that the central bank has concluded its monetary easing cycle and measures to support currency stability.

The Thai baht THB=TH inched higher for a third consecutive session, trading around 31.34 a dollar. The ringgit, the best-performing Asian currency of last year, slipped marginally.

Meanwhile, advance estimates showed Malaysia's economy expanded 5.7% in the fourth quarter, accelerating from the previous quarter.

Elsewhere, the Philippine peso PHP= inched higher after touching a lifetime low of 59.524 against the U.S. dollar in the previous session, while equities in Manila .PSI nudged lower.

HIGHLIGHTS:

Yield on Indonesia's 10-year bonds ID10YT=RR at 6.230%
Malaysian economy grew 5.7% year-on-year in Q4 2025
Indonesia FDI growth flat in 2025, eyes pick-up in 2026

Japan, Philippines sign new security pacts as regional tensions rise

Singapore's December exports rise 6.1% y/y, weaker than expected