Photo: gorodenkoff / arc-group.com
Asian chipmakers lead emerging-market stocks rally on tech demand
Three semiconductor giants account for nearly two-thirds of the MSCI Emerging Markets Index's 22% gain this year, raising questions about the rally's durability
The MSCI Emerging Markets Index is up 22% year-to-date, which sounds like a broad-based comeback story for developing economies. It’s not. Strip out three Asian chipmakers and the picture looks very different.
TSMC, Samsung Electronics, and SK Hynix have collectively contributed roughly 14 percentage points of that 22% advance through late June. Three companies, representing just over a quarter of the index’s weight, are responsible for about half of its expected earnings growth in 2026.
The numbers behind the chip surge
TSMC shares have climbed 53% year-to-date. Samsung has surged 150%. SK Hynix has rocketed 200%.
Both Samsung and SK Hynix have crossed the $1 trillion market capitalization threshold. The MSCI Emerging Markets Index hit record highs in late April as the chipmaker rally intensified. South Korea’s KOSPI index rose more than 75% in 2025 and nearly 97% in dollar terms. January 2026 alone delivered a 24% gain for the KOSPI, driven almost entirely by semiconductor and AI exposure.
AI demand is the engine
TSMC manufactures the most advanced logic chips on the planet, producing silicon for Nvidia, AMD, and a growing roster of hyperscalers designing their own custom processors. Samsung and SK Hynix dominate high-bandwidth memory, the specialized chips that sit alongside GPUs in AI servers and move data fast enough to keep up with trillion-parameter models.
AI, tech, and the markets they move—in one daily briefing.
Daily. Free. Join 34,000+ readers across crypto, finance, and policy.
A rally this narrow carries real risk
When three stocks drive half of an index’s earnings growth, the index isn’t really telling you much about emerging markets as an asset class. It’s telling you about semiconductors.
The fragility of this dynamic showed up briefly in mid-July, when a semiconductor selloff introduced volatility after the index had been climbing steadily for months. Escalating concerns about valuation and potential demand cooling triggered a sharp pullback that rippled across the broader emerging-market complex.
The three largest chip names represent just over one-quarter of the index’s total weight. When TSMC sneezes, the MSCI Emerging Markets Index catches a cold, regardless of what’s happening in Brazilian banks, Indian consumer stocks, or Southeast Asian industrials.