As volatility in Samsung Electronics and SK Hynix widens, investor interest shifts to semiconductor materials, parts and equipment ETFs

As volatility in the domestic stock market led by Samsung Electronics and SK Hynix increases, the semiconductor materials, parts and equipment ETF is emerging as an alternative.

According to the Korea Exchange (KRX) on the 12th, Samsung Electronics has been experiencing heightened volatility due to war risks and a sharp rise in oil prices after hitting a peak at 223,000 won. SK Hynix has also fallen more than 20% before rebounding, underscoring the recent sharp swings in individual stocks and indices.

While sentiment toward the semiconductor sector driven by Artificial Intelligence (AI) remains positive, some investors are taking profits on Samsung Electronics and SK Hynix and voicing concerns that the stocks may have reached a short-term peak. As a result, the market is increasingly focused on where investment sentiment will head after Samsung Electronics and SK Hynix. Expectations for continued orders flowing from these two chip giants, along with earnings prospects for the broader semiconductor sector, are also supporting interest.

In fact, HANMI Semiconductor, seen as one of the biggest beneficiaries of AI servers and High Bandwidth Memory (HBM) growth, now has a market capitalization on the Korea Composite Stock Price Index (KOSPI) approaching 30 trillion won. Aggressive investment by major players leading the HBM market, including SK Hynix, has fueled optimism about sales of its Thermocompression bonder (TC bonder) equipment and new bonding tools.

Doosan Group, which has drawn attention as a nuclear power-related stock, was selected as the preferred bidder to acquire wafer producer SK Siltron, a move expected to strengthen Doosan Group's semiconductor value chain. LEENO Industrial has also been on an upward trend, supported by rising demand for AI semiconductors. The company holds world-leading technology and order share in semiconductor test sockets and is drawing attention as a key on-device AI play.

As semiconductor equipment stocks continue to perform well, the returns of Exchange-Traded Funds (ETF) that include these names are also climbing. As of the close on the 10th, the one-year return of the SAMSUNG KODEX AI Semiconductor Core Equipment ETF was 200.43%. Over the same period, the SOL AI Semiconductor Materials & Equipment ETF returned 153.09%, the SOL Semiconductor Front-End Process ETF 151.00%, and the TIGER AI Semiconductor Core Process ETF 149.31%. The SAMSUNG KODEX AI Semiconductor Core Equipment ETF selectively invests in domestic semiconductor equipment makers considered among the biggest beneficiaries of the industry's growth.

Whereas many other ETFs hold Samsung Electronics and SK Hynix at high weights, this ETF focuses exclusively on semiconductor equipment stocks excluding those two names. It offers a potential option for investors looking ahead to the market beyond Samsung Electronics and SK Hynix.

Lee Dae-hwan, a manager at Samsung Asset Management, said, "Funds that had been concentrated in Samsung Electronics and SK Hynix are now flowing into semiconductor equipment and component stocks as well," adding, "There is growing interest in ETFs that allow investors to gain exposure to core semiconductor equipment companies excluding Samsung Electronics and SK Hynix." Park Su-min, head of ETF strategy at Shinhan Asset Management, predicted, "Recently, the shortage of generic memory such as Dynamic Random Access Memory (DRAM) and NAND flash memory has intensified, and we expect this warmth in demand to spread across key materials, parts and equipment companies throughout the front-end process and back-end semiconductor process value chains."



kakim@fnnews.com Kim Kyung-a Reporter