As major semiconductor companies like Samsung Electronics and SK Hynix face challenges, stocks of materials, components, and equipment (known as 소부장) firms are experiencing a significant surge. Investor interest is shifting from large-cap stocks to mid- and small-cap semiconductor companies amid expectations of improved semiconductor market conditions and increased equipment investments.
According to the Korea Exchange on October 11, the KRX Semiconductor Index has risen 11.42% over the past month, marking the highest return among major KRX stock indices. In comparison, the KRX Mid-Cap TMI and KRX Small-Cap TMI saw increases of only 7.71% and 7.27%, respectively.
Notably, despite the underperformance of leading semiconductor stocks, the sector index has shown strength. During this period, Samsung Electronics and SK Hynix saw their stock prices decline by 2.78% and 6.25%, respectively. In contrast, semiconductor 소부장 companies listed on the KOSDAQ recorded double-digit gains, driving the index upward.
Specifically, Simtek surged 41.87% in just one month, while JUSUNG Engineering rose by 37.46%. Other notable performers included Rino Technology, which increased by 27.58%, EoTechnics at 17.36%, and Wonik IPS at 15.46%. JUSUNG Engineering briefly reached the second-highest market capitalization on the KOSDAQ due to its stock price surge.
This trend has also contributed to a widening performance gap between the KOSPI and KOSDAQ indices. While the KOSPI fell by 4.72% during the same period, the KOSDAQ rose by 9.90%. The strong performance of semiconductor 소부장 companies is believed to have bolstered the KOSDAQ index's rebound.
The influx of investment into 소부장 stocks is largely driven by expectations of increased equipment investments from global semiconductor companies. Analysts suggest that the rising demand for AI-related semiconductors is highlighting the potential for improved performance among equipment and component firms.
Kim Rok-ho, a researcher at Hana Securities, predicts that the semiconductor equipment market outlook for 2027 could be revised upward due to large-scale expansions by major domestic and international semiconductor companies.
However, there are cautions regarding the rapid stock price increases. Analysts emphasize the need for caution in investments, noting that the ability of companies to meet heightened market expectations amid a high-interest-rate environment will likely influence future stock price trends.
Lee Jae-won, a researcher at Yuanta Securities, stated that while the supply and demand dynamics have shifted from Samsung Electronics and SK Hynix to semiconductor 소부장 and IT hardware sectors, it may be premature to expect this upward trend to extend to other sectors in the current high-interest-rate environment.
Similarly, Kang Jin-hyuk, a researcher at Shinhan Investment Corp, noted that if expectations for AI-related performance can offset macroeconomic pressures, a recovery in the upward trend may be possible. However, if performance falls short of expectations, profit-taking could occur.
* This article has been translated by AI.
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