Global investors are shrugging off Iran worries and returning to markets in Asia, the ‘backbone of the whole AI value chain’

Asia’s stock markets have rebounded since the outbreak of the Iran war over two months ago, as the AI boom lifts the fortunes of manufacturing economies like China, South Korea, and Japan.

“Asia was outperforming global markets before the Iran conflict started,” Charu Chanana, Saxo Bank’s Singapore-based chief investment strategist, tells Fortune. While there was an initial pullback following the war’s outbreak, “things have started to recover in the last two weeks and Asia is outperforming again”.

One reason is growing demand for AI and its related infrastructure. Asia houses three-quarters of the world’s semiconductor manufacturing, so a global surge in demand for AI processors and memory chips is lifting the fortunes of chip and chip-related companies. JPMorgan analysts, in a 2025 market review, noted that tech-related growth is now spreading globally following a decade of U.S. overperformance.

South Korean firms like SK Hynix and Samsung are cashing in on the high-bandwidth memory (HBM) market, while TSMC dominates in logic chip manufacturing. East Asia holds nearly all of the world’s production capacity for chips smaller than 10nm, which are essential to cutting-edge AI technology and other........

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