--- title: "Investors reduce holdings in Asian chip stocks as historic rally faces correction pressure" type: "News" locale: "en" url: "https://longbridge.com/en/news/292453945.md" description: "After a strong rise of approximately $1.8 trillion, investors are gradually reducing their holdings in Asian chip manufacturers. Institutions such as Fidelity International and BlackRock are concerned about the sustainability of the stock price increases of AI supply chain companies like Taiwan Semiconductor, SK Hynix, and Samsung Electronics, due to their high weight in the MSCI Emerging Markets Index and signs of an overheated market. Despite these companies recently achieving record performances, foreign capital has significantly sold off Korean stocks, and some fund managers have begun to take profits and shift to other targets" datetime: "2026-07-13T07:58:08.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/292453945.md) - [en](https://longbridge.com/en/news/292453945.md) - [zh-HK](https://longbridge.com/zh-HK/news/292453945.md) --- # Investors reduce holdings in Asian chip stocks as historic rally faces correction pressure According to reports, after experiencing a strong surge of approximately $1.8 trillion, investors are gradually reducing their holdings in Asian chip manufacturers. Major global asset management firms such as Fidelity International and BlackRock have expressed concerns about the sustainability of the stock price increases of key AI supply chain companies like Taiwan Semiconductor, SK Hynix, and Samsung Electronics. The combined market capitalization of these three companies has nearly doubled in the past six months, and even though SK Hynix and Samsung Electronics have recently seen a pullback in their stock prices, their combined weight in the MSCI Emerging Markets Index has risen to about 29%, surpassing the weight of most individual countries. Caroline Shaw, a multi-asset portfolio manager at Fidelity International, pointed out that the concentration of the index, combined with the surge in leveraged positions in Korean chip stocks, has become a significant signal for assessing whether the market is overheating. She stated that she has reduced exposure to growth stocks and is now focusing on relatively undervalued targets in emerging markets. Wei Li, BlackRock's global chief investment strategist, revealed that due to increased volatility in certain chip and memory stocks, the firm is willing to take profits at this point and reduce its overweight position in emerging market equities. Data shows that since 2026, these three chip giants have dominated the major gains in emerging markets driven by price increases due to chip supply shortages. Their weight in the MSCI Emerging Markets Index is nearly three times that of all components in the Indian stock market, with SK Hynix alone exceeding the combined weight of Brazil and South Africa. Although the index has risen about 19% year-to-date, it has retreated from its peak, and some investors have begun to take profits and shift towards mature markets that are less correlated with traditional AI trading. The Korean Composite Index has fallen more than one-fifth from its June peak. Last week, SK Hynix raised $26.5 billion in a Nasdaq listing and both it and Samsung Electronics recorded record quarterly profits. However, foreign investors have sold approximately $100 billion worth of Korean stocks this year, putting pressure on the Korean won against the US dollar. Some active fund managers have reached internal limits that prevent single stock holdings from exceeding 10% of the fund's net value, or have adjusted positions to meet US tax-related regulatory requirements. The dominant position of chip stocks in the emerging market index puts fund managers in a dilemma: if the industry faces sudden shocks such as intensified competition or a decline in capital expenditures from leading cloud service providers, excessive tracking of the benchmark index could severely drag down performance; but at the same time, the continued growth expectations for AI data storage demand suggest that the price increase cycle for related stocks may be far from over. In the first quarter of this year, Samsung Electronics and SK Hynix together achieved profits exceeding $50 billion, far surpassing the less than $10 billion level of the same period last year Suneel Thirumalai, head of emerging market equity strategy at UBS, stated that the aforementioned companies have formed an oligopolistic structure, which is an inherent characteristic of the technology industry. Monopolistic companies typically continue to generate substantial profits and become high-quality targets. However, some analysts have pointed out risks. Kieran Poon, director of Asian equity investments at Aberdeen, noted that TSMC's stock performance has lagged behind the other two this year, partly due to American competitor Intel's recovery in the chip foundry business under its new CEO. Some investors believe that the current emerging market index is dominated by tech giants that are highly correlated with the U.S. market, weakening the traditional logic of allocating to emerging markets to diversify risk. James Johnstone, co-head of emerging and frontier markets at Redwheel Capital, pointed out that emerging markets have traditionally been viewed as a dual diversification tool for risk and performance, but the semiconductor sector currently holds a significant weight in both the U.S. and emerging market indices. 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