This article first appeared on GuruFocus.
Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) is still one of Asia’s most important AI beneficiaries, but investors are no longer treating it as the only way to play the Nvidia-driven boom. TSMC shares are up about 46% this year on strong sales and earnings, but that gain now looks modest beside the more than 140% rallies in MediaTek (MDTTF) and Samsung Electronics (SSNLF). The shift suggests traders are moving beyond the most advanced chips TSMC manufactures for Nvidia (NVDA), as AI demand spreads into memory, storage, robotics, CPUs and other hardware tied to the next phase of the buildout.
That broadening matters because AI spending is possibly moving deeper into inference, where targeted workloads may require a wider hardware stack. MediaTek has become one of the hotter names after helping Alphabet (NASDAQ:GOOG) create application-specific integrated circuits, while Samsung is benefiting from its position as the world’s largest memory maker. Samsung has also narrowed its valuation gap with TSMC and joined the $1 trillion club, showing how the AI trade is no longer centered on one dominant Asian proxy.
Fund positioning could be adding another layer to the move. Many active funds face a 10% single-stock limit, while TSMC now accounts for more than 40% of Taiwan’s Taiex, pushing managers to look for other AI-linked names that can help them keep pace with the index. Some investors are increasing exposure to MediaTek, Samsung, ASE Technology Holding (NYSE:ASX), Chroma ATE (CRMJF), and other Taiwan tech names tied to chip packaging, power management, cooling and printed circuit boards, suggesting the AI trade could be shifting from a single-stock proxy into a broader Asian technology basket.
