HONG KONG, May 12 (Reuters) - Global hedge funds ramped

up bets on Asia, with weekly buying of South Korean, Japanese

and Taiwanese stocks hitting a 10-year high last week, according

to a Morgan Stanley ( MS ) client note.

Most of the equities buying "took place outside the U.S.

with APAC driving the majority of the activity," said a Morgan

Stanley ( MS ) prime brokerage team note that was sent to clients on

Friday. It was seen by Reuters on Tuesday.

The hedge fund inflows into South Korea, Japan and Taiwan

came from "clients across all regions/all strategies," driving

the week that ended on May 7 to be the heaviest week of buying

in more than a decade in notional terms, the bank said, without

providing specific figures.

Notional buying refers to gross buying volumes.

Global investors have rushed to gain exposure to Asian tech

firms as they seek artificial intelligence beneficiaries. South

Korea, Taiwan and Japan have emerged as key sites for

semiconductor and hardware investment.

Asia's three most valuable companies are chipmakers - Taiwan

Semiconductor Manufacturing Co ( TSM ), Samsung Electronics ( SSNLF )

and SK Hynix - and their recent record

earnings have put a spotlight on their critical roles in the

global AI supply chain.

"We are still early in the international tech cycle, and Asia

remains underowned, undervalued and increasingly central," said

Hussein Sacoor, a partner at Tekne Capital, a New York-based

hedge fund.

In terms of cost and bill of materials, roughly 90% of the

tech supply chain sits in Asia, while most capital remains

concentrated in U.S. markets, he added.

Major benchmarks in South Korea, Taiwan and

Japan all hit fresh highs last week.

Morgan Stanley ( MS ) said buying orders last week were focused on

semiconductors and hardware.

Hedge funds' net exposure to Japan, South Korea and Taiwan

rose to the highest point since Morgan Stanley's ( MS ) prime brokerage

team began tracking the data in 2010, now accounting for about

19% of global positioning, the bank added.

A separate note by Goldman Sachs ( GS ) said April had the largest

monthly hedge fund buying inflows into Asian equities in a

decade after a sharp selloff in March.