{"slug": "emerging-markets-are-now-an-ai-chip-trade-chart-of-the-day", "title": "Emerging markets are now an AI chip trade: Chart of the Day", "summary": "Emerging market ETFs are increasingly tied to the AI chip trade as South Korea and Taiwan funds surpass China-focused funds in assets, pulling investors into the same global semiconductor cycle driving US tech. The shift means broad EM allocations now carry significant exposure to chipmakers like Samsung, SK Hynix, and TSMC, reducing diversification benefits from US tech.", "body_md": "Investors often buy emerging markets to get something different from the US stock market's biggest trades. That is getting harder.\n\nSouth Korea and Taiwan ETF assets have climbed over those of China-focused funds, according to Strategas ETF Research. That shift moves the center of gravity in emerging-market ETFs toward two of the world's most important semiconductor markets.\n\nChina still matters. It just no longer owns the EM story the way it once did.\n\nFor years, emerging markets were often shorthand for China, commodities, currencies, and faster-growing consumer economies outside the US. Now, a growing slice of the trade runs through the AI supply chain, pulling EM investors into the same global chip cycle driving US tech.\n\nSouth Korea brings Samsung ([005930.KS](https://finance.yahoo.com/quote/005930.KS/)) and SK Hynix ([000660.KS](https://finance.yahoo.com/quote/000660.KS/)). Taiwan adds Taiwan Semiconductor Manufacturing ([TSM](https://finance.yahoo.com/quote/TSM/)). Together, they make a broad EM allocation look less like a clean break from the US tech trade and more like another route into AI hardware.\n\nInvestors have already been looking for [ETF escape routes from crowded tech exposure](https://finance.yahoo.com/markets/article/the-tech-trade-is-overcrowded-heres-your-etf-escape-route-chart-of-the-day-100000111.html). Emerging markets can still help, but the label is doing less work than it used to.\n\nThis week's chip sell-off — the worst since early March — made that point harder to ignore. When semiconductor stocks slide, the pressure does not stay inside US chip ETFs. It can travel through country funds, broad EM funds, and anything tied to Korea and Taiwan.\n\nThe second wrinkle is that not all EM funds own the same version of EM.\n\nThe iShares MSCI Emerging Markets ETF ([EEM](https://finance.yahoo.com/quote/EEM/)) includes South Korea because MSCI classifies it as *emerging*. The Vanguard FTSE Emerging Markets ETF ([VWO](https://finance.yahoo.com/quote/VWO/)) excludes South Korea because FTSE classifies it as *developed*.\n\nThat index difference leaves EEM with about 5 percentage points more semiconductor exposure than VWO, according to Strategas.\n\nDiversification is no longer just about adding an international ticker or an EM fund to a portfolio. It is about checking what is inside the wrapper.\n\nEmerging markets can still diversify a portfolio. In some funds, buying EM now also means buying the AI chip trade through yet another door.\n\n*Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at **@SPYJared** or email him at jaredblikre@yahooinc.com.*\n\n**Click here for in-depth analysis of the latest stock market news and events moving stock prices**\n\n**Read the latest financial and business news from Yahoo Finance**", "url": "https://wpnews.pro/news/emerging-markets-are-now-an-ai-chip-trade-chart-of-the-day", "canonical_source": "https://ca.finance.yahoo.com/news/emerging-markets-are-now-an-ai-chip-trade-chart-of-the-day-115540648.html", "published_at": "2026-06-28 11:55:40+00:00", "updated_at": "2026-06-28 12:06:31.733416+00:00", "lang": "en", "topics": ["ai-chips", "ai-infrastructure", "ai-products", "ai-startups"], "entities": ["Samsung", "SK Hynix", "Taiwan Semiconductor Manufacturing", "iShares MSCI Emerging Markets ETF", "Vanguard FTSE Emerging Markets ETF", "Strategas ETF Research", "Yahoo Finance", "Jared Blikre"], "alternates": {"html": "https://wpnews.pro/news/emerging-markets-are-now-an-ai-chip-trade-chart-of-the-day", "markdown": "https://wpnews.pro/news/emerging-markets-are-now-an-ai-chip-trade-chart-of-the-day.md", "text": "https://wpnews.pro/news/emerging-markets-are-now-an-ai-chip-trade-chart-of-the-day.txt", "jsonld": "https://wpnews.pro/news/emerging-markets-are-now-an-ai-chip-trade-chart-of-the-day.jsonld"}}