[Click eStock] "Semiconductor Concentration Phenomenon to Continue for the Time Being"

Hi Investment & Securities stated on the 4th, "A balanced recovery across all industries is necessary, but considering the current global industrial and policy landscape and the status of domestic exports, some degree of concentration in the semiconductor sector is inevitable," and predicted, "This trend is expected to continue for the time being."

On the same day, Park Sang-hyun, a researcher at Hi Investment & Securities, said, "As of the 2nd, the semiconductor sector's market capitalization accounted for 28.6% of the total domestic market capitalization, closely approaching the previous peak of 29.3% on March 24, 2020."

Although the semiconductor market capitalization has surpassed its previous peak level, the market capitalization of other sectors excluding semiconductors has not recovered to their previous peak levels. Researcher Park stated, "This concentration in the semiconductor sector in the domestic stock market is not unrelated to the global trend. Although the reputation of the United States has recently weakened, there is a significant market concentration phenomenon represented by the Magnificent 7 (Nasdaq's seven major tech stocks, M7) among big tech companies," adding, "While major countries' stock markets, led by the U.S., are reaching all-time highs, the overall global manufacturing economy remains sluggish, and only some advanced industries such as artificial intelligence (AI) are showing growth trends, resulting in a concentration of funds."

In South Korea as well, differentiation between the semiconductor sector and other sectors is intensifying not only in exports but also in the manufacturing sector. Researcher Park explained, "It is difficult to view a stock market centered on some sectors such as semiconductors positively. The upward trend relying on the growth of a few sectors has its limitations," but added, "However, considering the global industrial restructuring, especially the strengthening of supply economies or industrial policy orientations centered on advanced industries in major countries worldwide, the stock prices and industrial trends of some sectors are, in a way, inevitable."

The United States is also likely to continue mid- to long-term investments to expand supply capabilities centered on advanced industries such as AI. The proportion of semiconductor exports in total domestic exports is also trending upward. Researcher Park added, "As of last month, semiconductor exports accounted for 20% of total exports, approaching the previous peak of 23% in May 2020. Considering the significant potential for semiconductor export volume to further expand in the second quarter, the current concentration in the semiconductor sector is not judged to be excessively concerning."