[Provided by Shinhan Asset Management]
[Provided by Shinhan Asset Management]

Shinhan Asset Management announced Wednesday that it completed a regular rebalancing of its SOL AI Semiconductor TOP2 Plus ETF. The rebalancing added Wonik IPS, Daeduck Electronics, PSK, VM and TES to the fund while removing LG Innotek, ISC, RFHIC, Korea Circuit and Exicon.

The SOL AI Semiconductor TOP2 Plus ETF has grown into one of South Korea's leading semiconductor ETFs, with net assets in the 6 trillion won range, since it listed in March with an initial size of 11 billion won ($7.31 million). As of Tuesday on the Korea Exchange, cumulative net purchases by retail investors since listing have reached 3.42 trillion won, making it the top semiconductor ETF in South Korea by year-to-date retail net purchases.

Following the rebalancing based on the underlying index methodology, major constituent weightings as of Tuesday on the Korea Exchange are: SK hynix at 25.75 percent, Samsung Electronics at 24.84 percent, SK Square at 16.20 percent, Samsung Electro-Mechanics at 15.04 percent and Isupetasys at 5.56 percent. The newly added constituents are Wonik IPS at 3.03 percent, Daeduck Electronics at 2.93 percent, PSK at 2.60 percent, VM at 1.71 percent and TES at 1.65 percent.

The rebalancing reflects the anticipated expansion of capital expenditure by major memory chip companies — including Samsung Electronics, SK hynix and Micron — and the resulting potential increase in front-end equipment orders.

As supply-demand conditions in the memory chip sector improve on the back of AI data center investment and growing HBM demand, major chipmakers are pushing ahead with new factory construction and expansion of existing production facilities. Low memory inventory levels and a growing number of long-term supply contracts are also factors supporting continued capital expenditure growth.

For high-specification memory chips such as HBM in particular, the wafer area required per unit is larger and process complexity is higher than for commodity products, which may limit actual capacity gains relative to capital spending increases. Memory chipmakers are therefore likely to sustain elevated capital expenditure to meet customer demand.

Wonik IPS is a semiconductor equipment company supplying tools for both memory and foundry processes. PSK has secured a global customer base centered on dry-strip equipment, while VM is pursuing overseas customer expansion and next-generation etch equipment development. TES has a key earnings catalyst in the mass production ramp of new equipment for HBM processes.

Kim Jeong-hyeon, head of the ETF business group at Shinhan Asset Management, said the rebalancing incorporated front-end equipment companies with improved earnings prospects driven by rising capital expenditure among memory chipmakers. "Going forward, we plan to maintain the core investment structure anchored in the top two holdings — Samsung Electronics and SK hynix — in line with the underlying index methodology, while adjusting constituent stocks and weightings through regular rebalancing to reflect market and industry changes," he said.

The product has gained popularity among retail investors this year thanks to its design that overweights Samsung Electronics and SK hynix. Shares of both companies had been under pressure for some time amid renewed Iran tensions and concerns about a semiconductor peak. Both surged Wednesday on positive momentum from the United States. As of 9:16 a.m., Samsung Electronics was trading up 5.70 percent at 278,000 won. SK hynix rose 10.25 percent to 2.109 million won at the same time, reclaiming the "2-million-nix" threshold.


th5@heraldcorp.com