Korean Semiconductor Equipment ETFs Surge 30% Amid AI Capex
Semiconductor equipment ETFs in South Korea posted 30% monthly returns, significantly outpacing major memory chipmakers as AI-driven capacity expansion boosts order backlogs.
South Korean-listed exchange-traded funds focused on semiconductor materials and equipment have recorded monthly returns of approximately 30%, substantially outperforming the country’s largest chip manufacturers. This divergence highlights a market rotation where investment momentum is shifting from finished-goods producers to the suppliers of fabrication infrastructure. The performance gap reflects the immediate translation of artificial intelligence memory demand into physical capacity expansion orders.
According to data from GN stocks/chips, the top ten Korean ETFs by one-month returns as of September 9 are exclusively semiconductor-related. The KIWOOM K-Semiconductor North America Supply Chain fund led the group with a 32.72% gain, followed by the KODEX AI Semiconductor Core Equipment at 31.29% and the SOL Semiconductor Front-End Process at 29.88%. In contrast, broader sector funds like the KODEX Semiconductor and TIGER Semiconductor rose 25.85% and 25.69% respectively, indicating that investors are favoring specific equipment segments over general industry exposure.
Equipment Stocks Outperform Memory Giants
Individual front-end process equipment makers have posted steeper gains than their downstream counterparts. HPSP surged 48.88% over the past month, while Jusung Engineering climbed 45.88% and PSK Holdings advanced 44.19%. These figures far exceed the 16.92% and 19.93% increases recorded by Samsung Electronics and SK Hynix, respectively. The concentration of these high-performing stocks in top-tier ETFs amplifies the sector's overall return profile, with companies like Jusung Engineering and HPSP appearing in three of the top five products.
The SOL Semiconductor Front-End Process fund, which allocates 51.02% of its assets to Jusung Engineering, HPSP, and Wonik IPS, achieved a one-month return 6.09 percentage points higher than its back-end counterpart. This gap underscores the market’s preference for front-end fabrication stages, where new wafer processing equipment is installed during facility construction. Back-end processes, such as packaging and testing, have seen more modest gains, with the SOL Semiconductor Back-End Process posting a 23.79% return.
Capex Cycle Drives Order Backlogs
Shinhan Securities characterizes the current market phase as the early stage of a memory capital expenditure cycle. The firm notes that equipment makers benefit directly from new facility installations, leading to larger profit increases compared to suppliers of materials and consumables. This dynamic is evident in the order backlog data, which shows a significant accumulation of future revenue for deposition equipment manufacturers ahead of full production ramps.
The combined order backlog for four key deposition equipment makers—Wonik IPS, TES, Jusung Engineering, and Eugene Technology—reached approximately 1.2 trillion won at the end of June. This figure represents a 64% quarter-over-quarter increase and a 135% year-over-year rise. Park Hyun-woo, a senior analyst at Shinhan Securities, projects that orders for new fabs coming online next year will begin accelerating in the fourth quarter of this year, further supporting the valuation of equipment-focused funds.
