Hanwha Asset Management is rolling out two exchange-traded funds that invest in companies supplying materials, parts and equipment for high-bandwidth memory (HBM) and artificial intelligence chips.
The firm said on the 15th that it is listing two new products, PLUS Korea HBM Semiconductor and PLUS AI Semiconductor Materials, Parts and Equipment Active.
PLUS Korea HBM Semiconductor allocates about 50% to Samsung Electronics and SK hynix, with the remaining 50% spread across eight domestic suppliers. The supplier holdings include PSK, VM, TES, Wonik IPS, Simmtech, Jusung Engineering, Isu Petasys and Daeduck Electronics.
Samsung Electronics and SK hynix together hold about 80% of the global HBM market. According to Bloomberg, the global HBM market is expected to expand to $68 billion this year from $35 billion last year, then top $100 billion next year. With AI adoption driving rapid growth in HBM demand, capital spending by the two companies to expand capacity is also expected to accelerate. As a result, analysts say the benefits could spread from front-end equipment such as etching, cleaning and deposition to packaging and testing firms as well as makers of parts and substrates.
PLUS AI Semiconductor Materials, Parts and Equipment Active is an actively managed product in which fund managers select chip suppliers and adjust weightings according to market conditions. Holdings are chosen based on analysis of customers' capital expenditure, equipment orders and mass-production schedules, and the adoption of new technologies.
Order backlogs, changes in revenue and operating profit forecasts, and valuations relative to growth rates are also used as key criteria. Major holdings include Isu Petasys, Intekplus, Doosan, ISC, SFA Semicon, TES, DI, Psk Holdings, Simmtech and Hansol Chemical.
Large investment plans by domestic memory makers are also raising growth expectations for the supplier sector. Samsung Electronics plans to invest more than 110 trillion won in facilities and research and development this year, while SK hynix has announced investment plans worth about 54.3 trillion won, including its Y2 plant in Yongin and M17 in Cheongju. Goldman Sachs projected that capital spending at the two companies would rise 59% and 75%, respectively, this year.
"We expect the benefits of the memory upcycle to be reflected first in large-cap stocks, then spread to materials, parts and equipment companies as capital spending is executed," said Keum Jung-seop, head of Hanwha Asset Management's ETF business division. "Investors can put money into the center of the industry's recovery through Korea HBM Semiconductor, and pursue gains from the spread of capital spending through AI Semiconductor Materials, Parts and Equipment Active."
