2026/6/5 (Fri) Chip Stock Selling Pressure Has Arrived! C.C. Wei: Keep Buying Our Shares! Why Did TSMC Underperform the Market in 2026? 【Morning Financial Summary】
- Emerging market ETFs (EEM) have undergone a structural shift, with TSMC, Samsung, and SK Hynix now making up nearly 30% of the index, making it effectively an Asian AI fund.
- MediaTek is aggressively entering the custom ASIC market, forcing Broadcom to admit its clients are seeking secondary suppliers and aiming for a 10-15% market share by 2027.
- TSMC's AGM delivered strong confidence, with Chairman C.C. Wei reiterating a decade-long technology lead, earnings growth outpacing capex, and a customer-centric pricing strategy.
- AI data centers face severe physical and public resistance, with 71% of Americans opposing local construction, forcing cooling revolutions and nuclear restarts like Microsoft's Three Mile Island project.
- The AI race's second half hinges on capital; by 2027, free cash flows for tech giants could turn negative without immediate productivity returns, leading to a temporary valuation cooling.
The "Asian Semiconductorization" of Emerging Market ETFs
Many investors still associate emerging markets with commodities, energy, or traditional manufacturing. However, recent weightings reveal that TSMC, Samsung, and SK Hynix now make up nearly 30% of the emerging markets ETF. Adding Tencent and Alibaba pushes the top five companies to over 35%. This concentration has essentially transformed the emerging markets ETF into an Asian Semiconductor ETF, which has even outperformed the Philadelphia Semiconductor Index over the past year.
With capital flooding into Taiwanese and South Korean markets, China's share in the index has shrunk to roughly 20%. This massive wave of capital, driven by artificial intelligence infrastructure, is reshaping the landscape of global emerging markets. Compared to US tech giants trading at high multiples, these Taiwan-and-Korea-dominated hardware supply chain assets boast solid earnings per share (EPS) support, keeping their valuations resilient.
The useful move here is structural, not rhetorical: the host reclassifies "emerging markets" by looking at what now dominates the index rather than relying on the old label. That matters because once TSMC, Samsung, and SK Hynix drive the weight and earnings power, you're no longer making a generic EM bet — you're underwriting an AI hardware supply chain. It's a transferable habit: before accepting an ETF's category name, inspect concentration and profit drivers first.
MediaTek's ASIC Expansion Threatens Broadcom's Dominance
The custom chip (ASIC) market is undergoing a major reshuffle. Projects for hyperscalers, historically monopolized by Broadcom, are now facing fierce competition from MediaTek. Broadcom recently admitted for the first time that its customers are actively seeking a "second source," a revelation that sent its stock tumbling by nearly 15%.
Simultaneously, MediaTek is leveraging deep partnerships with Google and Nvidia to expand its international ASIC footprint. MediaTek's management has raised its 2027 global data center ASIC market forecast to $80 billion, setting a bold target to capture 10% to 15% of the market within two years. Given its virtually zero historical presence in this segment, this move opens up an immense new growth curve.
The brief slides too quickly from MediaTek's ambition to implied inevitability. Raising a 2027 TAM forecast to $80 billion and targeting 10%–15% share is management guidance, not evidence that the share capture will actually happen. The missing step is execution detail: which hyperscaler programs convert, when they ramp, and whether "second source" means real volume or just bargaining leverage against Broadcom.
Three Key Signals from TSMC's AGM
At the TSMC annual general meeting, Chairman C.C. Wei radiated confidence. He emphasized that TSMC's lead in advanced nodes spans "at least ten years or more," noting that the gap with competitors has only widened since the company surged ahead at 10nm. Regarding capital expenditure, Wei clarified that despite worries about a spending plateau, TSMC's earnings and revenue growth actually outpace its capex expansion, ensuring superb cash flow flexibility.
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