Technology
This $400M hedge Fund Is betting big on AI Hardware
Kuark Capital has launched a $400 million hedge fund targeting Asian semiconductor and AI-related companies as global investors increase exposure to chip supply chains. The launch comes amid strong gains in Asian technology stocks and rising AI infrastructure spending tied to advanced semiconductor demand across Taiwan, Japan and South Korea.
Kuark Capital launched a $400 million Asia-focused hedge fund targeting semiconductor and AI supply-chain companies across major regional markets.
Key Highlights
- Kuark Capital launched a $400 million hedge fund focused on Asian AI and semiconductor companies.
- Taiwan, Japan and South Korea remain key markets tied to global semiconductor production.
- Morgan Stanley reported decade-high hedge fund buying activity across North Asian equity markets.
- Asia-focused long-short hedge funds returned 10% during the first four months of 2026.
Kuark Capital has established a $400-million hedge fund dedicated to stocks in Asia's semiconductor and artificial-intelligence-related businesses, reflecting the growing trend among investors to pile in on chip supply-chain stocks as AI investments ramp up worldwide.
The Hong Kong-based firm, which was established by investor Kyle Su, will mainly invest in Taiwan, Japan and South Korea. The strategy will focus on companies that are associated with semiconductor manufacturing, chip packaging, electronic material and infrastructure for the AI industry, according to sources with knowledge of the situation.
It is coming after a surge in demand for advanced chips, particularly due to significant investments in AI infrastructure by leading tech giants. Recent results have been positive for Nvidia and Taiwan Semiconductor Manufacturing Co., reinforcing the notion that spending on artificial intelligence servers and semiconductor capacity will stay high until 2026.
AI Stocks Make a Comeback in the Semiconductor Trade
Earlier this month, hedge funds had purchased the most Taiwan, Japan and South Korean shares in over a decade weeks ago, said a recent prime brokerage report from Morgan Stanley. The three markets together account for approximately 19% of hedge funds' positioning worldwide since 2010, the bank said.
In the first four months of 2026, long-short hedge funds in Asia outperformed their global counterparts, with the average performing a 10% return versus 5.2% for the world as a whole, according to another Morgan Stanley report. Strong returns came from semiconductor stocks.
Taiwan is still home to the world's leading company in advanced chip manufacturing, Taiwan Semiconductor Manufacturing Co., and South Korea has the big two memory chip makers Samsung Electronics and SK Hynix. Japan remains a key supplier to the world of semiconductor equipment and specialty materials across the entire semiconductor manufacturing industry.
A low-exposure strategy is becoming more popular.
Kuark Capital will trade the fund in a low-net-equity long-short fashion. The strategy involves investing in stocks that are likely to appreciate in value and selling short on stocks that are likely to decline in value, but restricting exposure to the market during times of volatility.
But a Reuters tally of industry data earlier revealed that a number of hedge funds focused on Asia have performed at a higher level than their global counterparts during recent market turbulence linked to uncertainty over interest rates and technology stocks.
Leadership Team develops research profile
Prior to joining Kuark Capital, Su headed a team that managed approximately $1 billion in equities at Hong Kong-based Kadensa Capital for almost nine years, investor documents seen by Reuters show.
In addition, Hiro Ikeda has been promoted to director of research at the firm. Ida was previously with Fidelity Investments and T. Rowe Price, and Optimas Capital.
FAQs
Q1. What companies will Kuark Capital’s new hedge fund target?
The fund will focus on semiconductor, AI infrastructure and technology companies across Taiwan, Japan and South Korea.
Q2. Why are investors increasing exposure to Asian chip stocks?
Rising AI infrastructure spending has increased demand for advanced semiconductors and related supply-chain companies.
Q3. What strategy will Kuark Capital use for the new fund?
The firm plans to use a low-net-equity long-short strategy designed to reduce broader market exposure during volatility.
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