[Edaily Reporter Kim Hyung-il ] On the KOSPI, the upward trend is continuing, led by major semiconductor-related stocks such as SamsungElectronics(005930)and SK hynix(000660), while on the KOSDAQ, the rally is centered on companies in the semiconductor materials, parts, and equipment (MPE) sector. Previously, financial stocks—which are representative dividend stocks—were performing strongly on the KOSPI, and pharmaceutical, biotech, and secondary battery stocks were leading gains on the KOSDAQ; however, as concerns over the semiconductor industry’s outlook have eased, market attention appears to be shifting back to semiconductors.

According to the Korea Exchange’s Data Marketplace on the 18th, the total market capitalization of the KOSPI rose by 219 trillion won, from 5,445.1937 trillion won at the end of July to 5,664.4790 trillion won on that day. During the same period, the combined market capitalization of the four major semiconductor companies—SamsungElectronics, SK hynix,SamsungElectroMechanics(009150), andSKSQUARE(402340) —also rose by 29 trillion won, from 3,011.907 trillion won to 3,041.1358 trillion won.

Last month, as large-cap semiconductor stocks underwent a correction, market attention shifted to financial stocks, which demonstrated relatively strong price resilience. However, as concerns about the semiconductor industry have recently eased, semiconductor-related stocks are once again drawing market attention.

Analysts suggest that the correction in large-cap semiconductor stocks was driven largely by supply-and-demand factors—such as portfolio rebalancing by foreign investors—rather than a deterioration in the industry’s fundamentals. The argument is that as the domestic stock market rose faster than those of other countries, selling pressure emerged as foreign investors adjusted their weightings of Korean stocks. However, market volatility increased because there was insufficient buying demand to absorb this supply. Since there has been no major problem with the semiconductor business cycle itself, the explanation is that the semiconductor sector’s market leadership has been maintained even after the correction.

Park Hee-chan, Head of Research at MIRAE ASSET Life Insurance CO., Ltd., analyzed, “The semiconductor sector has not lost its market leadership,” adding, “The primary cause of the recent market correction lay in supply-and-demand issues rather than semiconductor fundamentals.” He explained that while market volatility increased as foreign investors sold domestic stocks during the rebalancing process, the fundamentals of the semiconductor industry remain intact.

Memory demand and price trends driven by AI investments are cited as the reasons behind the sustained optimism regarding the semiconductor sector. Park noted, “Semiconductor demand is inherently strong, and there is currently a shortage of memory chips,” adding regarding AI investments, “Orders are already fully booked through next year.” He continued, “DRAM prices are also remaining high and continue to rise,” explaining that expectations for the semiconductor industry and earnings have not changed significantly despite recent stock price volatility.

On the KOSDAQ market, the expansion of semiconductor materials, parts, and equipment companies is particularly notable. JUSUNG ENGINEERING Co.,Ltd.(036930)·WONIK IPS Co.,Ltd.(240810)·EO Technics Co., Ltd.(039030)·SIMMTECH Co., Ltd.(222800)·TSE CO.,Ltd(131290)·LEENO Industrial Inc(058470)The combined market capitalization of these companies increased by 7.7132 trillion won, rising from 26.1293 trillion won at the end of July to 33.8425 trillion won on the 18th. During the same period, the total KOSDAQ market capitalization rose by 61.3492 trillion won, from 400.1983 trillion won to 461.5475 trillion won. The combined market capitalization growth rate of the six companies was 29.5%, significantly outpacing the KOSDAQ’s overall growth rate of 15.3%. While interest in large-cap semiconductor stocks is rising on the KOSPI, the upward trend on the KOSDAQ appears to be spreading to small and mid-cap companies linked to the semiconductor investment cycle.

Analysts suggest that the temporary strength shown by the pharmaceutical/biotech and secondary battery sectors on the KOSDAQ was not due to a weakening of the semiconductor sector’s dominance, but rather a result of a temporary shift in supply and demand. While capital flowed into sectors such as pharmaceuticals and biotech during the semiconductor sector’s lull, the upward momentum in those sectors failed to sustain itself, leading interest to shift back to semiconductor-related stocks, which have relatively sound fundamentals.

Park, the head of the division, said, “Overall, semiconductors continue to lead the market; it’s best to view the rise in pharmaceuticals and biotech as merely a brief interlude that occurred while semiconductors were stalling.” Regarding the strength in pharmaceuticals and biotech, he noted that it was a “supply-and-demand counterbalance,” so the momentum did not last long, and the market has since shifted its focus back to sectors with relatively sound fundamentals.

Ko Tae-bong, Head of Research at iM Securities, noted that U.S. companies’ second-quarter earnings confirmed there has been no significant shift in AI investment trends. He assessed that as market concerns regarding the sustainability of AI investments were partially alleviated by the earnings reports, the extreme volatility seen recently has subsided, and the market has entered a phase where investors can once again focus on corporate fundamentals.