Secondary battery stocks, long sidelined in South Korea's stock market, have staged a rebound that pushed related exchange-traded funds to the top of return rankings. Money rotated into the sector as chip stocks paused, while the spread of artificial intelligence data centers has made energy storage systems a new source of battery demand.
TIGER Secondary Battery TOP10 Leverage rose 45.88% over the past month as of the previous session, according to Koscom's ETF CHECK on the 2nd. KODEX Secondary Battery Industry Leverage jumped 38.99% over the same period. Their one-week returns of 13.96% and 11.30% ranked first and second among all ETFs listed in Korea. Funds investing in solid-state batteries, silicon anode materials, battery components and North American supply chains also filled out the top of the rankings.
The shift reflects investors moving away from the leaders that had propped up the market toward neglected sectors. Chip stocks have been catching their breath since the Jackson Hole meeting in the United States raised the prospect of a rate increase, compounded by cash flow concerns tied to Big Tech's large-scale AI spending. Over the past month, Samsung Electronics and SK hynix fell 0.57% and 1.46%, while cathode material and battery makers surged — L&F up 78.99%, Samsung SDI up 43.32% and POSCO Future M up 38.93%.
Industry watchers say the rally may amount to more than a rotation into oversold names. As AI data centers drive power demand higher, energy storage systems are emerging as the battery industry's next growth market after electric vehicles. The sector had been held back by a prolonged EV chasm, a temporary slowdown in demand, but analysts say the power grid is now generating fresh battery demand.
Global growth has been steep. The North American ESS market reached 75.9 gigawatt-hours in the first half of this year, up 83% from 41.5 GWh a year earlier. The combined share held by LG Energy Solution and Samsung SDI rose to 19.7% from 13.9% over the same period, with LG Energy Solution alone more than tripling its share to 13.6% from 4.2%.
Policy changes in the United States are also seen as favorable for Korean battery makers. On the 26th of last month, Washington designated energy storage systems as critical power infrastructure tied to national security, bringing batteries along with related equipment and software under supply chain oversight. The move raises barriers for Chinese products, fueling expectations that Korean companies with North American production bases will benefit.
"Secondary battery stocks are in a phase where policy premiums and hopes for an earnings turnaround are being priced in at the same time," said Choi Bo-young, an analyst at Kyobo Securities. "If quarterly earnings improve in the second half and ESS orders expand, this rebound could go beyond a rotation and turn into an earnings-driven rally."
