Semiconductor ETFs in the Korean stock market diverged by nearly 40 percentage points from June 2 to July 3. ETFs holding front-end equipment stocks such as VM and PSK posted double-digit gains, while products concentrated in back-end companies recorded double-digit losses during the same period. The divergence followed Samsung Electronics and SK Hynix announcing mid-to-long-term investment plans late last month, raising market expectations for increased memory investment and front-end equipment demand.
HANARO ETF Returns 24.45% While TIGER ETF Falls 13.79%
According to the Korea Exchange on the 6th, the highest-performing semiconductor ETF (excluding leveraged and inverse products) over the recent one-month period (June 2–July 3) was HANARO Semiconductor Core Process Leading Stock, which rose 24.45%. SOL Semiconductor Front-End Process gained 18.77%, and UNICORN SK Hynix Value Chain Active returned 10.73%. In contrast, TIGER AI Semiconductor Core Process and KODEX AI Semiconductor Core Equipment fell 13.79% and 13.13%, respectively, during the same period. IBK K-AI Semiconductor Core Tech also declined 13.49%.
VM and PSK Holdings Drive Top ETF Performance
Top-performing semiconductor materials, parts, and equipment ETFs shared a common trait: high weightings in memory front-end equipment stocks. HANARO Semiconductor Core Process Leading Stock held VM at 18.33%, PSK at 14.02%, and TES at 11.33% as its top three holdings. UNICORN SK Hynix Value Chain Active also allocated the largest weightings to VM (4.87%) and PSK (4.76%) after SK Hynix and SK Square.
Underperforming ETFs shared a common feature of holding high-bandwidth memory (HBM) back-end and packaging value chain stocks as top holdings. TIGER AI Semiconductor Core Process held Hanmi Semiconductor at 23.67% and ISU Petasys at 16.31%, while KODEX AI Semiconductor Core Equipment allocated the most to ISU Petasys (21.24%) and Hanmi Semiconductor (18.98%). During the same period, VM and PSK stock prices surged 82.62% and 94.35%, respectively, while Hanmi Semiconductor and ISU Petasys fell 20.65% and 21.02%, respectively.
SK Securities Analyst Prioritizes Front-End Equipment Stocks
Securities firms attribute the recent surge in market interest in semiconductor front-end companies to growing expectations for increased memory company investment. The analysis suggests that Samsung Electronics and SK Hynix announcing mid-to-long-term investment plans late last month reflected expectations that front-end equipment demand would recover first. Lee Dong-joo, an SK Securities analyst, stated, "The semiconductor materials, parts, and equipment upcycle period will extend," adding, "Within materials, parts, and equipment, we prioritize front-end equipment." The analyst said, "We judge that orders are beginning to accumulate and an earnings rally will continue from the second half," citing TES, Wonik IPS, and PSK as preferred stocks.
Back-end companies, meanwhile, appear to be taking a breather. Analysts note that profit-taking continued as concerns emerged over short-term earnings slowdown due to the gap between the end of HBM3E orders and HBM4 investment, compounded by high valuation burdens.
FAQ
What caused the 40-percentage-point divergence in Korean semiconductor ETF returns from June 2 to July 3?
ETFs holding front-end equipment stocks such as VM and PSK gained double digits, while ETFs concentrated in back-end companies like Hanmi Semiconductor and ISU Petasys posted double-digit losses. The divergence followed Samsung Electronics and SK Hynix announcing mid-to-long-term investment plans late last month, raising expectations that front-end equipment demand would recover first.
Which semiconductor stocks did SK Securities analyst Lee Dong-joo identify as preferred?
Lee Dong-joo cited TES, Wonik IPS, and PSK as preferred stocks, stating that the semiconductor materials, parts, and equipment upcycle period will extend and prioritizing front-end equipment within the sector.
