Foreign brokerages broadly overweight South Korea and Taiwan for AI-related exposure, while India is often considered underweight.

TSMC now holds a 14.2% weight in the MSCI Emerging Markets index, the largest single-stock weight in 30 years, helping Taiwan become the top-weighted country at about 24.8% and overtaking China amid AI-driven semiconductor demand.

Taiwan’s top-weight status is driven by TSMC’s prominence, with its weight surpassing India’s 11.94% as of April 30, 2026, and India trailing in the MSCI EM index.

The MSCI EM index has become increasingly concentrated, with the top 10 holdings making up about 34.64% of the index, elevating risks for passive funds and reducing diversification.

The MSCI EM index is heavily tracked by passive funds, with assets exceeding $750 billion, making TSMC a focal point for passive flows into emerging markets.

Acadian Asset Management notes that TSMC is the largest single-company weight in the EM index over the past 30 years, highlighting concentration concerns.

India’s weight in the MSCI EM index has slipped to 11.94%, its lowest in over six years, reflecting a sector mix with limited direct AI-hardware exposure despite major names like HDFC Bank and Reliance Industries.

India’s weight has declined from a 2024 peak of around 20%, underperforming the index by more than half since then.

Analysts favor South Korea and Taiwan over India for AI exposure, with continued AI capacity demand supporting TSMC’s fundamentals while raising questions about pure EM exposure.

Valuations show TSMC trading at a forward P/E around 37.7 amid AI-driven optimism, with Taiwan and South Korea viewed as preferable AI supply-chain plays versus India.

Within the MSCI EM top 10 constituents, Indian firms like HDFC Bank and Reliance Industries appear but each contribute around 0.8% of the index.

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