[Edaily Reporter Kim Kyung-eun ] Analysts have pointed out that as volatility in the semiconductor sector—which led the domestic stock market in the first half of this year—has increased, there is a need to diversify portfolios in the second half. They advise broadening investment areas beyond semiconductors to include national strategic industries such as shipbuilding, defense, and nuclear power, and taking a long-term perspective.

Park Ji-hwan, Deputy Head of the ETF Digital Marketing Division at Korea Investment Trust Management, recently appeared on E-Daily’s YouTube channel “Jutopia” and stated, “While we view the outlook for the semiconductor sector positively, the increased volatility means there is a greater need to diversify portfolios by allocating weightings across different industries and sectors.”

SamsungElectronics(005930), a major domestic semiconductor stock, posted a 178.6% gain in the first half of this year but has since fallen 30.8% in the second half (as of the 7th). SK hynix(000660) also saw its growth momentum slow, rising 307.1% in the first half but falling 46.3% in the second half.

However, the outlook for the semiconductor industry remains positive from a long-term perspective. The assessment is that even if profit growth rates slow, the absolute scale of profits is increasing, making it difficult to definitively determine a peak based on past semiconductor cycle patterns.

He explained, “While memory semiconductors were historically a quintessential cyclical industry, their business model is now being transformed to enable steady growth,” adding, “Earnings visibility is improving thanks to long-term supply agreements (LTAs), so unlike in the past, we can view the industry as having moved beyond its cyclical nature.”

He also cited structural supply shortages as a factor supporting the semiconductor market. The analysis suggests that with production lines concentrated on high-bandwidth memory (HBM), supply and demand for general-purpose memory have also become tight, and it is not easy to increase supply in the short term. Additionally, he viewed the continued capital expenditures (CAPEX) by global Big Tech companies for artificial intelligence (AI) as a positive factor.

As promising industries outside the semiconductor sector for the second half of the year, he highlighted shipbuilding, defense, and nuclear power—collectively referred to as the “Ship-Defense-Nuclear” sector. This assessment is based on the view that all three industries possess global competitiveness and are poised to benefit from geopolitical shifts and government policies.

For the second-half investment strategy, three key factors were proposed: △ global competitiveness based on technological capabilities; △ the potential to benefit from increasingly complex international circumstances; and △ government policy support. The explanation emphasized the need to select industries capable of sustaining their performance and growth narratives for 3 to 5 years, or even up to 10 years.

Deputy Director Park explained, “As self-reliance in national defense grows in importance in this era of ‘every man for himself,’ a global rearmament trend is taking hold, centered on Europe and the Middle East,” adding, “The government is also fostering the defense industry as a strategic sector by expanding export financing, guarantees, and defense export funds.”

Shipbuilding and nuclear power were identified as sectors that can expect to benefit directly from South Korea-U.S. industrial cooperation. In shipbuilding, the report noted that domestic companies have secured technological competitiveness in large liquefied natural gas (LNG) carriers and eco-friendly, high-value-added vessels; furthermore, U.S. demand for naval vessel construction and maintenance, repair, and overhaul (MRO) could serve as a new growth driver.

The nuclear power sector is also projected to see medium- to long-term growth driven by increased electricity demand resulting from the expansion of AI data centers. Given that the Korean nuclear power industry possesses the capability to build plants “on time, on budget,” the analysis suggests that its role could expand in U.S. nuclear power plant construction, equipment supply, and small modular reactors (SMRs).

Korea Investment Trust Management plans to launch the “ACE Semiconductor Plus Strategic Industries” exchange-traded fund (ETF) on the 11th. This ETF will make fixed investments in four strategic industries—semiconductors, shipbuilding, defense, and nuclear power—while evaluating industrial competitiveness and policy support to select one additional industry. The fund is structured to invest in 10 stocks, selecting two leading companies from each of the five industries.