AI may have put US technology stocks back in the spotlight, but many of the companies enabling that growth are based much closer to home. From semiconductor manufacturing and memory chips to consumer electronics and digital platforms, Asia sits at the centre of the global technology supply chain.
Key takeaways
-
01
Asia technology ETFs have attracted strong investor inflows as AI investment broadens beyond the US
-
02
Technology-heavy Asian equity markets have outperformed broader emerging market benchmarks in 2026
-
03
Semiconductor demand, AI infrastructure spending and digital adoption continue to support earnings growth across the region
Asia's role in the AI investment cycle
Much of the attention around AI has focused on the Magnificent 7 technology stocks in the US. However, the production of AI infrastructure used by these hyperscalers relies heavily on Asia's technology ecosystem.
Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest semiconductor foundry1, remains the dominant supplier of advanced chips used in AI applications. South Korea's Samsung Electronics and SK Hynix – both of which recently topped US$1 trillion in market captalisation2 - are also critical providers of memory and storage technology required to support AI workloads.
This growing importance is being reflected in trade data. Technology exports from Taiwan are expected to grow almost 40% in 2026, their fastest rate of growth since the 1970s3, while South Korean semiconductor exports reached a record high of US$37 billion in May as demand for AI-related hardware accelerated.4
South Korea export growth hits over 4-decade high: Semiconductors drove a huge share in year-on-year growth
Source: Reuters/South Korea Customs Service, June 2026. Note percentage changes on a year-on-year basis.
As AI investment expands globally, Asian technology companies appear increasingly well positioned to capture a growing share of the economic benefits.
Flows are following the growth
Investor demand is increasingly reflecting this opportunity. Technology ETFs outside of developed markets have experienced a meaningful pickup in flows over the past 12 months as investors seek exposure to semiconductor manufacturing, hardware infrastructure and digital platform businesses.
Globally, emerging market tech ETFs have seen a cumulative US$4 billion in flows over the last 12 months, compared to just US$300 million the year before.5 In Australia, the iShares Emerging Markets ETF (IEM) – offering a 44% technology weighting6 - has seen over A$95 million in flows this year to date, compared to A$70 million of outflows in 2025.7
Like US technology ETFs in recent months, Asia technology funds are increasingly attracting investors seeking exposure to long-term structural growth themes rather than short-term market momentum.
Source BlackRock data as of 31 May 2026. Based on industry-wide cumulative flows to emerging markets technology ETFs
Performance highlights the opportunity
Technology-heavy Asian equity markets have been among the strongest performers globally in 2026.
The Taiwan equity market has delivered double-digit gains year-to-date, supported by strong semiconductor earnings and continued AI demand. South Korean equities have also benefited from improving export growth and memory chip pricing, recording an impressive return of over 100% for the year to date8.
As a result, these tech-centred markets are becoming an increasingly large part of emerging market benchmarks, helping to drive the outsized growth seen in emerging markets stocks this year. Taiwan and South Korea are now the largest geographic weightings within the MSCI Emerging Markets Index, which has returned 30% over the last year – significantly ahead of its long-run average of 9% annually since inception.9
MSCI country equity performance, year to June 2026
Source: LSEG/MSCI/BlackRock Investment Institute, 1 June 2026. The markets shown are the largest 25 by market cap
While valuations have risen alongside performance, earnings expectations continue to support the investment case.
Projected 12 month earnings growth for both Asia ex Japan and emerging market equities is around 36%10, with continued momentum likely to be driven by demand for semiconductors, AI infrastructure, cloud computing and digital services.
Accessing Asia technology through iShares ETFs
For Australian investors, ETFs provide a convenient and diversified way to gain exposure to Asia's technology leaders.
- iShares Asia 50 ETF (IAA) - IAA provides concentrated exposure to many of Asia's largest listed companies across China, Taiwan, Hong Kong, Singapore and South Korea, including a number of technology and internet platform leaders.
- iShares MSCI Emerging Markets ex China ETF (EMXC) - For investors seeking greater exposure to technology-focused markets such as Taiwan and Korea while reducing China exposure, EMXC can offer a more targeted approach to accessing Asia's AI supply chain.
- iShares MSCI Emerging Markets ETF (IEM) - IEM provides broad exposure to emerging market equities, including significant allocations to Taiwan, South Korea and many of the region's leading technology companies. The ETF includes holdings such as TSMC, Samsung Electronics and Tencent, providing diversified exposure to the broader growth opportunity.
A broader opportunity than US technology alone
While US companies continue to dominate headlines, the AI investment cycle is increasingly creating opportunities across the global technology ecosystem.
Asian technology companies play a critical role in manufacturing, infrastructure and digital innovation, providing investors with exposure to different parts of the value chain and potentially diversifying sources of growth.
With strong export trends, improving earnings expectations and increasing investor flows, Asia technology remains well positioned to benefit from many of the same structural themes supporting global equity markets today.
For investors looking to complement US technology exposure, ASX-listed iShares ETFs can provide a simple and scalable way to access one of the most important growth stories in global markets.
