TSMC, Samsung Electronics and SK Hynix account for more than 30 percent of the MSCI Emerging Markets Index, creating a structure in which emerging market returns are heavily influenced by a small group of semiconductor companies. As the AI chip rally cools, large asset managers are widening their focus to China and India as well as sectors such as consumer goods and energy. Korea’s market has been hit, while inflows to emerging market equity funds continue.

Stock market money in China is continuing to concentrate in the AI supply chain, including semiconductors, software and cloud, even as the broader economy slows. Investors are focusing on companies aligned with Beijing’s push for technological self-reliance, and performance gaps between mainland and Hong Kong markets reflect listing structures. Selective bets are also emerging among hardware and AI model companies. Price competition, highlighted by DeepSeek’s discounts and low API costs, is another key driver.