Is Now the Time? As Semiconductor Stocks Fall, Korean Retail Investors Go Bargain Hunting

As volatility in U.S. semiconductor stocks has recently widened, Korean retail investors have instead been aggressively buying semiconductor-related stocks and exchange-traded funds (ETFs). Six of the top 10 net-bought names were semiconductor-related products, suggesting investors were stepping in to buy the dip even as those names fell by double digits across the board.
According to Save-ro data from KSD on the 7th, six of the top 10 net-bought U.S. stocks by domestic investors from the 30th of last month through the previous day were semiconductor-related stocks and ETFs. The combined net purchases of those six products came to $552.67 million, or about 844.6 billion won, accounting for 68.1% of the total net buying among the top 10.
The top net buy was Direxion Daily Semiconductor Bull 3X Shares (SOXL), which attracted $200.58 million. Applied Materials followed with $95.51 million, while the ROUNDHILL T-REX 2X LONG DRAM DAILY TARGET ETF and Micron also drew net purchases of $84.92 million and $77.98 million, respectively. SNXX, which tracks twice the daily return of SanDisk, and SanDisk also made the top 10 list.
The semiconductor-related stocks and ETFs that ranked near the top in net buying all plunged over the same period. SOXL fell 27.0%, while Applied Materials and Micron dropped 18.0% and 14.7%, respectively. The 2x DRAM ETF declined 12.3%, and SNXX and SanDisk plunged 43.7% and 23.3%. In other words, all six semiconductor-related stocks and ETFs fell by double digits.
Market watchers say the recent selloff in semiconductor stocks reflects a cooling-off period after a sharp rally rather than a deterioration in fundamentals. In the second quarter of this year, the Philadelphia Semiconductor Index surged 87.8%, marking its highest quarterly return on record. With semiconductor and semiconductor equipment stocks now making up an all-time high share of the S&P 500, analysts say profit-taking pressure and even minor negative news could continue to amplify share-price volatility.
Seo Jeong-hoon, head of the global equities team at Samsung Securities Co., Ltd., said, "Last week’s news that Meta Platforms would lease excess computing resources is a good example of how the global market reacted sharply." He added, "Even though it had not been confirmed whether Meta actually had idle internal resources, the news was used as a pretext for profit-taking in the semiconductor sector."
Some analysts also say the recent slump has largely eased the technical overheating in memory-related stocks. They note that the rise in memory stock prices has been driven by improving earnings, and that valuation appeal remains intact because earnings estimates have risen even faster than share prices.
Seo said, "Given that the area with the clearest earnings visibility remains AI infrastructure, including semiconductors, it will be difficult for market leadership to change easily, even if macro conditions improve further."
[email protected] Bae Han-geul Reporter