Asia leads global value rotation amid chip woes

Something unusual is happening in Asian equity markets. Investors are quietly dumping the high-flying chip stocks that defined the region’s rally and rotating into the kind of boring, beaten-down value plays that haven’t led performance in years. The MSCI Asia Pacific value stocks index has climbed roughly 6% this quarter, while its growth counterpart has slipped about 2%. That gap represents the widest outperformance for value over growth since Q1 2022, when the global rate-hiking cycle first started punishing expensive tech names. The semiconductor reckoning SK Hynix shares plunged 14.7% in a single session in late July, while Samsung Electronics dropped 13.4% the same day. The information technology sector, which accounts for roughly a third of the regional index, has fallen 5.6% this quarter. Meanwhile, Asian financials have surged 12%. Competition from Chinese semiconductor firms has intensified, putting pressure on margins and market share for established players. The valuation gap is hard to ignore Asian value stocks are trading at 10.8 times one-year forward earnings. For context, US equities sit at 17.9 times, and European stocks trade at 12.3 times. Hedge fund manager Hao...