AI Boom Fuels Asian Market Surge

AI's Big Splash in Asia

If you've been glancing at the news in 2025, you'll have noticed that Artificial Intelligence, or AI, has been absolutely everywhere. And honestly, it's been a cracking good thing for Asia. Countries heavily involved in producing chips, networking gear, and all the bits and bobs that power the AI revolution have seen some fantastic returns.

Just look at the numbers. Taiwan's TAIEX Index, for instance, has shot up by 27% this year. Meanwhile, the indices in China and Korea have climbed by an impressive 33% and 74% respectively. It really shows how much the demand for AI infrastructure is boosting these economies.

This AI surge has given a significant lift to some major players in the Platinum Asia Fund. Take TSMC, the Taiwanese chip giant, which has seen its value jump over 45% in the last year. Then there's SK Hynix, a Korean chip manufacturer, which has an astonishing 200% increase. Even Samsung, the Korean mega-conglomerate, has staged a remarkable comeback after a few challenging years, with an 80% return. It seems companies like Tesla are regaining confidence in their chip offerings, which is great to see.

Even consumer-facing Chinese companies have been riding this AI wave. Alibaba, the online marketplace, is seeing rapid growth in its cloud business. They're developing a fast-growing large language model and even creating their own chips, aiming to compete with Nvidia within the Chinese market. Kuaishou, the short-video platform, has also benefited significantly. Their "Kling" AI text-to-video model has been a hit, and they're using AI to really boost recommendations and sales in their e-commerce ventures.

Trump, Tariffs, and Unexpected Twists

Now, the headlines that really made Asia-watchers a bit nervous this year were all about President Trump's talk of sweeping tariff changes. You might be surprised, then, to hear that some Asian sectors are actually getting a boost from US trade policies. Korean industrial companies, for example, are catching a tailwind from the "friend-shoring" and "re-shoring" of US manufacturing. HD Hyundai Marine, a Korean shipping stock, is a prime example, having seen an incredible share price run since June.

In some more positive news, October brought a further softening in President Trump's approach to Asian economies. He's promised to cut the Liberation Day tariff rates for Malaysia, Japan, and Korea, and has pulled back from some of the more extreme tariffs on China. It just goes to show, the political landscape can be incredibly dynamic.

Of course, the Asian markets are incredibly diverse, and sometimes companies thrive not because of big macroeconomic trends, but due to their own unique strengths. Our Indonesian retail holding, Astra International, is a good case in point. It's done well because a strategic review could well unlock some significant value for shareholders.

We also made a recent visit to Korea and decided to invest in LG Display. They're a TV and mobile screen maker, and we've noticed they've become much more disciplined about how they expand their capacity and manage their capital expenditure. It's these kinds of focused improvements that can really make a difference.

What's Next for 2026?

Looking ahead to 2026, there are several themes that could continue to shape the markets, perhaps shifting in importance or even fading a little.

1. AI's Evolution: AI is undoubtedly a transformative technology, but it's worth noting that some parts of the sector might be a bit overvalued at the moment. It'll be crucial to differentiate between genuine substance and market froth. For more insights into the future of AI in the region, explore APAC AI in 2026: 4 Trends You Need To Know.
2. A Weaker US Dollar: If the US dollar weakens, that could provide an additional boost for Asian markets.
3. Battery Demand: The demand for batteries, whether for electric vehicles or city power grids, looks set to continue supporting companies like our Chinese battery holding, CATL. This growing demand aligns with the broader shift towards sustainable technologies and could be further influenced by breakthroughs such as AI discovering new battery materials.

As always, we're on the lookout for companies that not only benefit from these broader thematic tailwinds, but also those that have simply "built a better mousetrap". I mean, who doesn't appreciate a business that has improved its processes, cut costs, and come up with ideas and products that genuinely delight their customers? It's often these fundamental strengths that drive long-term success. The International Monetary Fund (IMF) regularly publishes reports on economic outlooks and market trends in Asia, which can provide further context on these developments. And for a deeper dive into how AI is affecting market dynamics, consider reading about what happens when AI Stocks Dip, Don't Panic Yet!.