You see emerging markets Boom AI, as TSMC takes the lead center star-news.press/wp

Emerging markets have never been concentrated. Like Wall Street, their success is close to one technique: artificial intelligence.

Standard emerging markets indexWhich captures a large and medium representation in 24 countries, it is increasingly higher, and its performance is linked to one company. The semiconductor manufacturer in Taiwan (TSMC), the world’s largest semiconductor mastery, represents 10.2 % of its weight. This is the most exposed to one entity in the date of the 14 -year index.

To date this year, TSMC represents about 40 % of the index revenues. Compared, nvidia Contribute 22 % to the return of S&P 500 last year. An analysis of 384 EM boxes in 2023 found that two -thirds of TSMC as their largest record, and exceeded many records.

TSMC manufactures advanced chips for companies such as NVIDIA, Apple and Broadcom. The United States is buying 92 % of advanced artificial intelligence chips From the Taiwanese giant, according to data from the Boston Consulting Group cited by JPMorgan Chase. The increasing demand for these semiconductor arrows in TSMC to Triple since 2023.

Chris Miller wrote in his book 2022: “It can be said that Fabs from TSMC is the most important real estate in the world.” It was a chip.

Fears of focus are largely related to providing chains as AI Big Tech’s success becomes one company. “The world has become a lot on Taiwan for the semi -conductors,” said Pat Gilgener, former CEO of Intel in 2022.

But emerging markets are also riding on the continuous success of one company. Moreover, its huge contribution to the returns also holds the role of the historically emerging market funds for investors: to be a Hedge Against the American stock market.

However, TSMC’s success has become an increasing decree for the American chips industry after Washington ordered the suspension of requests to Chinese companies. The interlocking health of the S&P 500 and TSMC can threaten this reverse relationship, and causes more Chinese artificial intelligence in other major sales, such as Deepseek-R1, approximately $ 1 trillion of S&P 500 within January in January. The documentary bonds shared by the American Tech and TSMC company can threaten the reputation of emerging market funds as organizations.

Moreover, even if China has not raped the United States in the AI Arms race, the risks are still high. This is because the MSCI Em is deeper than just TSMC. The largest three components are Trent Holdings, Alibaba and Samsung from South Korea, each invested extensively in artificial intelligence. These companies together make up the five weight of the index. Consequently, Wall Street’s concerns about the financial fall will be followed if technology fails to provide the returns that investors were hoping to do so-It is called a name The “artificial intelligence bubble” – as applies to these funds.

Last year, “almost all returns in the MSCI EM index can be tracked to only five shares, led by TSMC, which alone contributed nearly half of the index’s return,” said Harding Lounesser analysts in A. a report. “Every sector except for information technology has decreased.”

The defects of this focus go beyond bubble fears. He pointed out that due to the major stocks that dominate emerging market funds, “investors are frustrated because these indexes offer less than 1 % of some of the best performance countries in the world during the past few years, such as Argentina, Colombia, Greece.”

However, investors have more options for redistributing exposure than they did in the past, as he added, with the choice of active, negative, regional and emiths money. “In the fragmented and developed global scene today, how to invest in (emerging markets) matters to the same amount that matters.”