While chip stocks, particularly those linked to AI training and inference computing infrastructure, along with the broader global semiconductor sector encompassing high-performance memory, logic, analog, and MCUs, have faced a pullback due to renewed Middle East geopolitical tensions, a top fund manager focused on emerging market equities asserts that chip stocks, especially those in Asia, represent the market's optimal tool for hedging against geopolitical war risks. The portfolio manager of an emerging markets equity fund, who has outperformed 96% of his peers over the past year, stated that Asian chip stocks concentrated on high-performance, advanced process nodes for artificial intelligence provide the best hedge against the prospect of a protracted conflict involving Iran.
According to the core views expressed by this fund manager, Jan de Bruijn, in a recent interview, the Robeco Emerging Stars Equities fund allocates over 40% of its assets to chip giants in the South Korean and Taiwan markets. This 40% exposure is primarily concentrated on memory chips and cutting-edge advanced process chip themes, reflecting the manager's key investment strategy: chip giants closely tied to artificial intelligence will maintain strong pricing power and fundamental expansion potential even during economic downturns or periods of high volatility in global financial markets.
Jan de Bruijn stated in the interview: "Artificial intelligence is absolutely not going to just disappear if the global economy goes into recession. Taiwan holds about 80%, or even higher, market share in the specific segment of logic chip manufacturing. South Korean chip giants hold a near-monopoly share of approximately 80% to 90% in the High Bandwidth Memory (HBM) market. So clearly, they can pass on a lot of unexpected high costs."
As illustrated, share prices of major Asian chip manufacturers have significantly outperformed both Asian and global equity markets year-to-date. Latest research from Omdia indicates that global semiconductor industry revenue is expected to surge over 30% in 2026, breaking through the historic milestone of $1 trillion for the first time. This robust growth is projected to be primarily driven by data center memory chips, AI GPUs/AI ASICs, and data center server CPUs, all fueled by continuously booming demand for AI training and inference computing power.
A recent significant report titled "2028 AI Doomsday Prophecy" by Citrini Research, presenting a comprehensive vision of a dystopian AI-shaped future, predicted that by 2028, despite supercharged AI productivity, a "global economic plague" would occur due to the complete disruption of white-collar jobs, reportedly triggering panic in global financial markets. However, both the author of this dystopian report and the fund manager Jan de Bruijn, who outperforms 96% of his peers, express strong bullishness on Asian chip giants including Taiwan Semiconductor Manufacturing, Samsung, and SK Hynix.
Citrini's "Memo on AI Boom Crisis from the Future" appears to reinforce a market bet: since Asia is home to core chip manufacturers like TSMC and numerous AI computing infrastructure manufacturing companies such as Hon Hai, SK Hynix, and Samsung, the Asian AI computing infrastructure supply chain will emerge as the biggest winner in the "AI disrupts everything" trend. This stands in stark contrast to the US technology sector, which has higher exposure to software and light-asset businesses and is experiencing turbulence.
Against the backdrop of Middle East geopolitical conflict, the top emerging markets equity fund is betting on Asian chips. According to the latest compiled institutional data, the total assets under management for the aforementioned Robeco Emerging Stars Equities fund were approximately $4.6 billion at the end of February. Its one-year investment return was 45%, and its year-to-date return for 2024 continues to outperform the vast majority of peers.
One of the fund's strategies involves proxy trades, meaning buying shares of holding companies that trade at a significant discount to their underlying assets, sometimes with discounts as high as 60%. This allows the fund to gain exposure to its preferred investment themes at relatively more attractive valuations. Consequently, the fund primarily holds the holding company SK Square Co., rather than directly taking a large position in SK Hynix; similarly, it primarily holds Naspers Ltd. (whose subsidiary Prosus has long been a major shareholder of Tencent HK SDR 10to1), rather than directly holding a significant position in Tencent HK SDR 10to1.
He stated in the interview: "You sometimes find a holding company that owns a majority stake in another company, and when you sum the parts in a sum-of-the-parts valuation, you find you are accessing that stock's investment thesis at a substantial valuation discount. We believe this discount will narrow over time."
The equity fund is overweight in Latin American markets, maintains a selectively configured exposure in Asia, and is underweight in the Middle East region. de Bruijn said: "I think, given what's happening now, our overall allocation is quite rational, especially our exposure to Asian chip stocks."
"As long as the thematic logic of massive AI capital expenditure remains intact in the market, Asian chip stocks are likely to be more resilient," stated Chetan Seth, an Asia-Pacific equity strategist at Nomura Holdings. "After all, Asia is the manufacturing hub for the most critical AI hardware infrastructure required for massive data center investments, and Asian stock markets – especially South Korea and Taiwan – have index weights heavily skewed towards the scarce hardware manufacturing companies that will benefit significantly from these growth trends."
While pessimistic narratives of "AI disruption" sweep the globe, Asian chip giants demonstrate a "hardcore" investment logic. As model scale, inference chains, and multimodal/agentic AI workloads drive exponential expansion in computing resource consumption, the capital expenditure focus of tech giants increasingly converges on AI computing infrastructure underpinning soaring demand. Global investors continue to anchor the "AI bull narrative," centered on new product cycles from Nvidia, Google TPU clusters, AMD, and AI cluster delivery expectations, as one of the most certain cyclical investment themes in global equities.
However, with the recent emergence of "AI panic trading" and the "AI disrupts everything" narrative erupting from US software stocks, global capital is increasingly shifting towards Asian equity markets, which have minimal exposure/weight to SaaS and light-asset software companies, and is pouring furiously into Asian chip stocks and the AI data center supply chain.
Geopolitical war undoubtedly disturbs market sentiment, but the AI computing arms race continues unabated,反而 making Asia's chip giants resemble "core assets amidst volatility." They enjoy not only earnings growth but also oligopoly premiums, capacity scarcity premiums, and upward shifts in safe valuation anchors during turbulent markets.
As fund manager Jan de Bruijn's core view suggests, within global equity markets, the "Asian chip super-giants," positioned at the heart of AI computing supply constraints and possessing arguably monopolistic market shares and absolute pricing power, represent one of the strongest thematic logics with sustained capital flows. Only these chip giants can manufacture the irreplaceable critical components within AI training and inference infrastructure.
Citrini-style AI doomsday concerns primarily target the vulnerability of software business models (seat-based, subscription renewals, process intermediation) in the era of AI agents/AI assistants – areas where US companies are highly concentrated. But regardless of turbulence in the software layer, as long as the world continues its "frenzied acquisition of AI computing infrastructure, massive construction of AI data centers, and training/inference/fine-tuning of large AI models," the upstream segments – semiconductors, memory, chip foundry/server manufacturing, 2.5D CoWoS/3D/3.5D advanced packaging and testing, servers/power/cooling, and the AI data center supply chain – are反而 more likely to be perceived as "more certain AI cash flow channels."
Therefore, unless the core logical chain of "AI capital expenditure -> hardware manufacturing and supply -> pricing power from computing scarcity" is disproven, Asian chip stocks and leaders in the AI computing supply chain are more likely to generate increasingly strong structural alpha.
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