"Under the war in the Middle East, the investment theme of 'hard logic' emerges! Fund managers who outperformed 96% of their peers bet on Asian chip stocks."

In the recent period, chip stocks closely related to AI training/inference computing power infrastructure, as well as a broader global category of chip stocks including high-performance storage, logic, analog, and MCU, have experienced a pullback due to a new round of Middle East geopolitical conflicts. A top fund manager focusing on emerging market stocks stated that chip stocks, especially chip stocks in the Asian region, are the best market tools for hedging against geopolitical war risks. The manager of an emerging market stock fund that has outperformed its peers by 96% in the past year stated that Asian chip stocks focusing on high-performance and advanced chip processes related to artificial intelligence provide the best hedge against the prolonged prospect of Iranian warfare. According to the core views of the fund manager Jan de Bruijn in a recent interview, the Robeco Emerging Stars Equities stock fund will allocate over 40% of its assets to chip giants in the South Korean and Taiwanese markets - with a 40% risk exposure primarily focused on storage chips and advanced chip processes. This reflects the main investment strategy of this top fund manager: chip giants closely related to artificial intelligence will maintain strong pricing power and fundamental expansion potential even in economic downturns or dramatic fluctuations in the global financial markets. Jan de Bruijn stated in the interview, "Artificial intelligence will definitely not disappear just because the global economy is in a recession. Taiwan holds up to 80% of the market share in the logic chip manufacturing subsector, and possibly even higher. South Korean chip manufacturing giants have near-monopoly market shares of approximately 80% to 90% in the high-bandwidth storage chip (HBM) market. So obviously, they are able to pass on a large amount of unforeseen high costs." As shown in the chart above, Asian chip giants' share prices have significantly outperformed Asian and global stock markets this year. The latest research from Omdia shows that global semiconductor industry revenue is expected to soar by over 30% by 2026, surpassing the historic milestone of 1 trillion US dollars for the first time. It is also betting that this strong growth is mainly driven by the strong demand for data center storage chips, AI GPU/AI ASIC, and data center server CPUs fueled by the continuous explosive growth of AI training/inference computing power. Citrini Research recently issued a "2028 AI Doomsday Prophecy" - a comprehensive vision of a dystopian AI future shaped by artificial intelligence. The organization predicts that despite the unexpected surge in global AI productivity by 2028, a "global economic plague" caused by the complete disruption of white-collar employment will trigger panic in the global financial markets. However, including the author of this dystopian report and the fund manager Jan de Bruijn who outperformed 96% of his peers, they are extremely bullish on Asian chip giants including TSMC, Samsung, and SK Hynix. Citrini's "AI prosperity crisis memo from the future" seems to reinforce a market bet: due to Asia's core chip manufacturers including TSMC and AI infrastructure manufacturing companies like Hon Hai, SK Hynix, and Samsung, the Asian AI computing infrastructure supply chain will be the biggest winner in the "AI disrupts everything" trend. In contrast, the US technology sector with high exposure to software and light assets is facing turbulence. Amid the background of Middle East geopolitical conflicts, top emerging market stock funds are betting on Asian chip stocks. According to the latest statistics compiled by institutions, the total assets of the Robeco Emerging Stars Equities stock fund at the end of February were approximately $4.6 billion, with a one-year return rate of 45%, outperforming the vast majority of its peers. One of the fund's strategies is to engage in proxy trading, buying stocks of holding-type companies that trade at a significant discount relative to their underlying assets, with discounts sometimes as high as 60%. This allows them to obtain exposure to their preferred investment themes at relatively more attractive valuations. Therefore, the fund holds mainly stock of holding-type company SK Square Co., rather than directly overweighting SK Hynix; and mainly holds Naspers Ltd. (Naspers' subsidiary Prosus has long been Tencent's largest shareholder), rather than directly overweighting Tencent. He stated in the interview, "Sometimes you will find that a holding company owns a majority stake in a company, and when you sum up the segmented valuation models, you will find that you are entering the investment logic of that stock with a significant valuation discount. We believe that this discount will continue to narrow over time." The fund is overweight in the Latin American market, maintains a selective exposure in Asia, and has a low exposure in the Middle East. De Bruijn said, "In terms of what is happening now, I think our final allocation is quite reasonable, especially for the risk exposure of Asian chip stocks." "As long as the massive theme of AI capital expenditure (AI CAPEX) logic continues to exist in the market, Asian chip stocks may be more resilient," said Chetan Seth, Asia-Pacific stock strategist at Nomura Holdings. "After all, Asia is the manufacturing center of key AI hardware infrastructure required for massive investments in AI data centers, and Asian stock markets - especially South Korea and Taiwan - are highly weighted towards those scarce hardware manufacturing companies that will greatly benefit from these growth trends." As the model scale, inference chain, and multimodal/agency-type agentic AI workloads drive exponential expansion of computing resources, the main capital expenditure of tech giants is increasingly focused on the concentration of AI computing infrastructure due to the strong demand for AI computing power. Global investors have been anchoring the "AI bull market narrative" around expectations of new product iterations from NVIDIA, Google TPU clusters, and AMD, continuing to see this as one of the most certain prosperity investment narratives in global stock markets. However, as recent "AI panic trading" and "AI disrupts everything" events have completely erupted in U.S. software stocks, global funds are increasingly shifting towards SaaS software stocks and Asia's stock markets with low risk exposure/weighting in software companies with high exposure. This trend particularly involves a frenzy of investments in Asian chip stocks and AI data center chains. Geopolitical warfare will undoubtedly disrupt market sentiment, but the AI computing arms race continues to thrive, making Asian chip giants appear more like "core assets in volatility." They enjoy not only profit growth but also oligopoly premiums, scarcity premiums, and upward shifts in fair valuations in turbulent markets. As the core view of fund manager Jan de Bruijn, within the global stock market, the "Asian chip super giants", situated at the core position of AI computing supply constraints, possessing near-monopoly market shares and absolute pricing power, can be considered one of the strongest and most sustainably funded deployment strategies. Only these chip giants can manufacture the irreplaceable key components of AI training and inference infrastructure. Citrini's AI doomsday concerns mainly target the vulnerability of software business models (seat systems, subscription renewals, process intermediation) in the era of AI agents/ AI intelligent bodies - these giants are highly concentrated in the U.S.; but regardless of the turmoil on the software end, as long as the global market continues to "madly purchase AI computing infrastructure, massively build AI data centers, train/infer/fine-tune AI large models," upstream semiconductor, storage, server/chip foundries, 2.5D CoWoS/3D/3.5D advanced packaging testing, server/power/dissipation, and AI data center chains are more likely to be seen as "a more certain channel for AI cash flow" until the logic chain of 'AI capital expenditurehardware manufacturing and supplyscarce pricing of computing power' is falsified. Asian chip stocks and leaders in the AI computing industry chain are likely to produce even stronger structural alpha amidst these circumstances. The narrative of the "AI disrupts everything" pessimism spreads globally, while Asian chip giants demonstrate a "hardcore" deployment logic. As the model scale, reasoning chain, and multi-modal/agency-type agentic AI workloads drive a massive expenditure of computing resources, the main capital expenditure of tech giants is increasingly inclined towards the concentration of AI computing infrastructure due to the exponential expansion of AI supply and demand. Global investors have continued to anchor the "AI bull market narrative" around expectations of new product releases and AI computing delivery from NVIDIA, Google TPU clusters, and AMD, considering this as one of the most certain prosperity narratives in global stock markets. However, as recent "AI panic trading" and "AI disrupts everything" events have completely erupted in U.S. software stocks, global funds are increasingly shifting towards SaaS software stocks and Asia's stock markets with low risk exposure/weighting in software companies. This trend particularly involves a frenzy of investments in Asian chip stocks and the AI data center chain. Geopolitical warfare will undoubtedly disrupt market sentiment, but the AI arms race continues to thrive, making Asian chip giants appear more like "core assets in volatility." They enjoy not only profit growth but also oligopoly premiums, scarcity premiums, and upward shifts in fair valuations in turbulent markets. As the core view of fund manager Jan de Bruijn, positioned at the core of AI computing supply constraints, the "Asian chip super giants", possessing near-monopoly market shares and absolute pricing power, can be considered one of the strongest and most sustainably funded deployment strategies. Only these chip giants can manufacture the irreplaceable key components of AI training and inference infrastructure. Citrini's AI doomsday concerns mainly target the vulnerability of software business models (seat systems, subscription renewals, process intermediation) in the era of AI agents/AI intelligent bodies - these giants are highly concentrated in the U.S.; but regardless of the turmoil on the software end, as long as the global market continues to "madly purchase AI computing infrastructure, massively build AI data centers, train/infer/fine-tune AI large models," upstream semiconductor, storage, server/chip foundries, 2.5D CoWoS/3D/3.5D advanced packaging testing, server/power/dissipation, and AI data center chains are more likely to be seen as "a more certain channel for AI cash flow" until the logic chain of 'AI capital expenditurehardware manufacturing and supplyscarce pricing of computing power' is falsified. Asian chip stocks and leaders in the AI computing industry chain are likely to produce even stronger structural alpha.