Investors are scaling back exposure to Asia’s chipmakers as the $1.8tn rally that vaulted them into the world’s biggest firms begins to unwind. Fidelity International and BlackRock cite concerns over the sustainability of the surge in TSMC, SK Hynix and Samsung Electronics, which now make up about 29% of the MSCI Emerging Markets index – more than all Indian stocks combined. Caroline Shaw of Fidelity says the concentration and leveraged bets are “markers in the sand” prompting a shift toward less‑loved emerging‑market names.

The trio, each worth roughly $1tn, have driven most of the 2026 gains in emerging markets, but their weight has tripled that of Brazil and South Africa combined. With the MSCI EM index up 19% YTD, investors are taking profits; foreigners have sold $100bn of Korean stocks this year, and the Korea market is down over 20% from its June peak. BlackRock’s Wei Li says the firm is “happy to take profit” amid volatility.

Analysts warn of risks from rising competition, notably Intel’s comeback and upcoming Chinese IPOs by CXMT and YMTC. The high concentration challenges the traditional diversification benefit of emerging‑market allocations, raising questions about the next cycle’s direction.