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The sharp swings that had characterized large-cap semiconductor stocks such as Samsung Electronics and SK Hynix are spreading to Kosdaq-listed semiconductor materials, parts and equipment shares and related exchange-traded funds. Semiconductor materials and equipment ETFs that surged Thursday extended their gains in early trading Friday, with capital flows moving fast enough to trigger a buy-side sidecar on the Kosdaq market. The broader trend points to sector rotation within the semiconductor space, shifting from large-cap names toward smaller materials and equipment suppliers.

Major semiconductor process, equipment and materials ETFs all advanced in early Friday trading. HANARO Semiconductor Core Process Leaders rose roughly 9 percent, SOL Semiconductor Front-End Process gained about 8 percent, and KODEX AI Semiconductor Core Equipment climbed around 6 percent. SOL AI Semiconductor Materials and SOL Semiconductor Back-End Process each added approximately 5 percent, while TIGER AI Semiconductor Core Process rose about 4 percent. On Thursday, SOL Semiconductor Front-End Process surged 13.34 percent and SOL AI Semiconductor Materials jumped 11.97 percent, with most major semiconductor process, equipment and materials ETFs posting gains of 8 to 13 percent.

These ETFs are thematic products weighted toward Kosdaq semiconductor equipment, process and materials stocks rather than large-cap names like Samsung Electronics and SK Hynix. Among the top Kosdaq stocks by market capitalization on Thursday, Jusung Engineering soared 23.37 percent and Wonik IPS climbed 20.82 percent. Eo Technics rose 15.07 percent and Lino Industrial advanced 7.31 percent.

Market participants view the rally as rotation within the semiconductor sector rather than a departure from the AI- and semiconductor-driven market theme. The prevailing analysis is that buying interest has spread to equipment and materials stocks — which had recently pulled back — after large-cap semiconductor names like Samsung Electronics and SK Hynix already went through their own sharp moves.

Lee Gyeong-min, a researcher at Daeshin Securities, said the surge in semiconductor materials and equipment stocks Thursday and the triggering of the Kosdaq buy-side sidecar were largely driven by an export surprise. "South Korea's exports from June 1 to June 10 hit a record high, with semiconductor exports jumping 205.8 percent and computer exports rising 259.4 percent, pointing to a clear IT-led improvement in export performance," he said. He added that expectations grew that strong exports could reinforce corporate earnings momentum, while the relative undervaluation of semiconductor materials and equipment stocks — which had lagged behind large-cap semiconductor names — drew strong buying interest.

Policy expectations are also cited as a factor supporting investor sentiment toward Kosdaq semiconductor materials and equipment stocks. The National Growth Fund and Kosdaq revitalization policies are seen as key variables for the Kosdaq market in the second half of the year. Kwon Myeong-jun, a researcher at Yuanta Securities Korea, said the first tranche of the National Growth Fund sold out entirely and that a second tranche is expected to go on sale in September. "Investment deployment from the National Growth Fund is expected to begin in the second half of this year," he said.

Expectations for a Kosdaq structural overhaul in July are also in play. Kwon said a proposed reorganization of Kosdaq market segments — into premium, standard and managed tiers — is likely to take shape around the Kosdaq 30th anniversary event on July 1. "Details are expected to be finalized in June," he said, adding that the changes could serve as a catalyst for improved investor sentiment toward the Kosdaq. If a new index centered on premium-segment flagship companies is introduced along with linked ETFs, institutional investors could gain a broader base for Kosdaq investment, analysts said.

Tougher standards for removing underperforming companies are also seen as a positive for Kosdaq investor sentiment. Kwon noted that starting in July, the market capitalization threshold for Kosdaq delisting will rise from 15 billion won (about $11 million) to 20 billion won, and stocks trading below 1,000 won will be added to the delisting criteria. "Delisting requirements are being tightened and standards for removing insolvent companies are being raised," he said, adding that a fundamental improvement in the Kosdaq's quality is expected to gain momentum.


kacew@heraldcorp.com