‘Not Samsung or SK Hynix’: Retail Investors Find Gains in Chip Materials ETFs [Lee Su’s ETF Zoom In]

Semiconductor materials, parts and equipment ETFs post strong returns over the past month

Seven of the top 10 best-performing products are semiconductor materials, parts and equipment ETFs

Materials, parts and equipment makers are poised to sustain growth on chipmakers’ fab expansions

South Korea’s ETF market made history in the first half of this year as net assets reached 500 trillion won ($361.3 billion). Leveraged ETFs tied to Samsung Electronics Co. and SK Hynix Inc., listed at the end of May, drew attention not only in Korea but across global equity markets. ETFs, once viewed as a supplementary investment vehicle, have now become a core investment product. takes a closer look at the increasingly complex ETF market. [Editor’s note]

Exchange-traded funds tied to semiconductor materials, parts and equipment have drawn investor attention after posting strong returns over the past month. Seven of the 10 best-performing products were in that category. Brokerage firms say the uptrend in those shares may continue for the time being, given fab expansion plans by chipmakers in Korea and overseas.

According to Koscom ETF Check on Oct. 3, seven of the top 10 ETFs by one-month return as of Oct. 2 were related to semiconductor materials, parts and equipment. The tally covers ETFs listed on the domestic stock market and excludes leveraged and inverse products.

DS Asset Management’s DS KOSDAQ Active posted the strongest return among ETFs listed on the Korean stock market during the period, at 32.36%. The actively managed fund invests in leading stocks in structurally growing industries on the KOSDAQ market. As of Oct. 2, its top five holdings were Simmtech Co. at 9.17%, SEMCNS Co. at 6.74%, EO Technics Co. at 4.75%, DKT Co. at 4.06% and Mico Co. at 3.70%. Four of those five companies, excluding DKT, are semiconductor materials, parts and equipment makers.

Mirae Asset Global Investments’ TIGER KOSDAQ150 IT ranked third with a return of 29.50%. The ETF invests across information-technology stocks in the KOSDAQ 150 index. Its top five holdings as of Oct. 2 were Jusung Engineering Co. at 8.88%, Wonik IPS Co. at 5.58%, EO Technics Co. at 5.55%, HPSP Co. at 5.29% and Simmtech Co. at 4.80%. All five are semiconductor materials, parts and equipment companies.

Shinhan Asset Management’s SOL Semiconductor Front-End Process ranked fourth with a return of 29.01%. The ETF focuses on Korean companies involved in front-end semiconductor processing. Its top five holdings were Jusung Engineering Co. at 20.62%, Wonik IPS Co. at 14.92%, HPSP Co. at 14.44%, PSK Inc. at 10.24% and Eugene Technology Co. at 8.33%.

Another Shinhan Asset Management fund, SOL AI Semiconductor Materials, Parts and Equipment, ranked sixth with a return of 28.34%. The ETF is diversified across Korea’s semiconductor materials, parts and equipment value chain, spanning front-end and back-end processes. Its top five holdings were Hanmi Semiconductor Co. at 15.47%, Jusung Engineering Co. at 10.92%, ISU Petasys Co. at 9.20%, Daeduck Electronics Co. at 6.79% and Wonik IPS Co. at 6.28%.

Other semiconductor materials, parts and equipment ETFs also placed in the top 10, including Samsung Asset Management’s KODEX AI Semiconductor Core Equipment, which ranked eighth with a return of 27.20%; Mirae Asset’s TIGER KOSDAQ Active, which ranked ninth at 26.77%; and KB Asset Management’s RISE AI Semiconductor TOP10, which ranked 10th at 26.49%.

The strength in semiconductor materials, parts and equipment stocks has been driven by rising capital spending by chipmakers in Korea and overseas. According to the financial investment industry, consensus forecasts for this year’s capital expenditure at Samsung Electronics and SK Hynix, based on the average of brokerage estimates, have been revised up 34% and 51%, respectively, from the start of the year. Consensus forecasts for next year’s capital spending have also risen sharply from the beginning of the year.

“On the front-end side, expectations for equipment orders tied to new production lines and process conversions are acting as a key driver,” said Cheon Ki-hoon, head of the ETF consulting team at Shinhan Asset Management. “On the back-end side, investment expectations are being supported by higher HBM stack counts and broader adoption of advanced packaging.” He added that stronger technological competitiveness among Korean materials, parts and equipment companies, along with a more diversified customer base, is supporting the case for structural growth alongside an industry recovery.

Against that backdrop, growth at semiconductor materials, parts and equipment companies is expected to continue. Kim Rok-ho, an analyst at Hana Securities, said the sector offers broad investment opportunities. Factoring in fab expansion schedules at chipmakers in Korea and abroad, visibility on top-line growth through 2028 is very high, he added.

Earnings will be the key variable in the next move for semiconductor materials, parts and equipment shares. During the third-quarter earnings season, investors will be watching whether rising orders are translating into actual sales and whether operating margins are improving alongside revenue growth, Cheon said. Another important gauge for medium- to long-term growth will be whether companies are securing overseas customers and making visible progress in supplying new products.

Lee Su, Hankyung.com reporter 2su@hankyung.com