BlackRock Flags Two Taiwan Stock Risks, Warns AI Supply-Chain Expectations Are Too High

The global AI boom has propelled technology shares to record highs, making Taiwan a focus for foreign investors because of its central role in semiconductors. But geopolitical tensions and highly leveraged speculation are fueling volatility in Asian markets. Forced liquidations in South Korea amid the U.S.-Iran conflict have prompted scrutiny of vulnerabilities in Taiwan’s similarly tech-driven market. BlackRock Investment Management (Taiwan)’s warning raises questions about whether the market can sustain its bull run and highlights the systemic risk posed by capital being excessively concentrated in AI.

The KOSPI plunged more than 8% on July 13, 2026, amid geopolitical conflict in the Middle East, triggering its seventh circuit breaker of the year and a wave of forced liquidations among retail investors. On July 14, BlackRock Investment Management (Taiwan) identified two hidden risks for Taiwan stocks: overly high global expectations for the AI supply chain, leaving share prices little room for error; and rising embedded leverage, including retail margin financing, which could become a source of volatility. BlackRock advised investors to refocus on fundamentals, avoid blindly chasing investment themes and favor hardware companies with resilient earnings.