Although the Kospi index climbed to a peak of 6,300, indicating a “bull market,” it was discovered that foreign investors sold significant amounts of large-cap semiconductor stocks while actively buying semiconductor equipment and component stocks. According to the analysis, as the index rose to new record levels, foreign investors cashed in on the large-cap stocks that contributed to the gains and moved their investments into more undervalued materials, parts, and equipment (MP&E) sectors, using a targeted trading approach.
◇International Investors Sell Shares in Samsung Electronics and SK Hynix
As per the Korea Exchange, foreign investors sold a net total of 11.7987 trillion South Korean won in stocks on the KOSPI market during the past week (February 23–27). Their overall net selling for the entire month of February amounted to 21 trillion won.
When the Kospi crossed the 6,000 level on the 25th of last month and went beyond 6,300 the next day, it is believed that foreign investors were taking profits, especially in big-cap stocks. The stock that was sold the most during this time was Samsung Electronics, with a net selling amount of 9.2893 trillion won. This was followed by SK Hynix, which recorded 3.3812 trillion won in net sales. Including preferred shares of Samsung Electronics, foreign investors sold more than 13 trillion won worth of these two major semiconductor companies throughout the week.
On the other hand, foreign investors have actively invested in equipment stocks within the same semiconductor industry. Hanmi Semiconductor topped the list of foreign net purchases during the past week, with 436.4 billion won. The company specializes in bonding equipment used to cut, stack, and attach semiconductor chips to substrates. A similar pattern was seen in the KOSDAQ market, where HPSP, a producer of high-pressure hydrogen annealing equipment for semiconductor microprocessing, recorded net purchases of 195.7 billion won, leading the foreign net buy rankings on KOSDAQ. Other semiconductor equipment stocks, including Yujin Tech (325.3 billion won) and ISC (406.2 billion won), also made it to the top net purchase list.
◇Materials, Components, and Gear Surpassing Semiconductors
In recent times, the rate at which the stock prices of MP&E companies, such as Hanmi Semiconductor, have increased has exceeded that of Samsung Electronics and SK Hynix. Hanmi Semiconductor’s stock price rose by more than 60% in the past week. This surge was driven by the company’s announcement on the 27th of last month regarding the launch of the world’s first “Board on Chip (BOC) and Chip on Board (COB) Bonder,” which it plans to supply to global memory clients. The equipment, a “Two-in-One” bonding tool that combines two processes, is considered an industry-first breakthrough.
Stocks connected to semiconductor equipment, including Seoul Semiconductor (up 54.8%) and Seongdo E&C (up 46%), also saw much stronger gains compared to Samsung Electronics (up 13.9%) and SK Hynix (up 11.8%) over the same time frame.
In the exchange-traded fund (ETF) market, products related to MP&E have recently drawn more attention compared to the two major cap stocks. According to Koscom’s ETF Check, four of the top five domestic ETFs based on return rate over the past week (February 23–27) were MP&E-related. The leading ETF was TIGER AI Semiconductor Core Process, which recorded a 17.1% return even without including Samsung Electronics and SK Hynix. KODEX AI Semiconductor Core Equipment came next with 16.6%, followed by SOL Semiconductor Back-End Process at 15.4% and SOL AI Semiconductor MP&E at 14.7%, securing the fourth and fifth positions respectively.
◇MP&E: Potential for Additional Growth?
Brokerage firms expect that companies dealing in equipment and components will experience slower performance gains as memory prices rise and capital spending on facilities increases. This is anticipated to result in a cascading impact throughout the semiconductor parts and equipment industry.
Lee Chang-min, a researcher from KB Securities, mentioned, “With the growing demand for AI, component stocks are not keeping up with the upward trend in the semiconductor sector. This year is expected to be the starting point for local component firms to become essential players in AI infrastructure, rather than just producers.” Ryu Hyung-geun, a researcher at Daishin Securities, noted, “Investment in back-end semiconductor machinery is about to take off. Focus should be placed on back-end equipment and companies involved in outsourced semiconductor assembly and testing (OSAT).”
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