Semiconductor ETF on the Rise, Eyes on Samsung Electronics' Earnings

Semiconductor ETFs Record High Returns This Year
TIGER Semiconductor TOP10 Leverage Tops All ETFs in Gains
US Semiconductor Boom and CES Optimism Drive Semiconductor Stocks
Focus on Samsung Electronics' Preliminary Earnings Impact

Thanks to the strong performance of semiconductor stocks this year, semiconductor exchange-traded funds (ETFs) have recorded high returns, drawing attention to Samsung Electronics' preliminary results for the fourth quarter of last year. This is because Samsung Electronics' preliminary results for Q4 last year fell short of market expectations, which is expected to influence the future stock price trends of semiconductor ETFs.

Yonhap News

According to the Korea Exchange on the 8th, TIGER Semiconductor TOP10 Leverage rose 20.80% year-to-date as of the previous day, recording the highest return among all ETFs. KODEX Semiconductor Leverage followed with a 20.44% increase, while HANARO Semiconductor Core Process Leading Stocks and UNICORN SK Hynix Value Chain Active posted returns of 13.18% and 13.03%, respectively, occupying the top four spots in overall returns among semiconductor ETFs. Additionally, ACE AI Semiconductor Focus recorded 11.95%, SOL AI Semiconductor Materials and Components 11.28%, KODEX AI Semiconductor Core Equipment 11.16%, and TIGER AI Semiconductor Core Process 10.98%, all achieving double-digit returns.

The strong performance of semiconductor stocks since the beginning of the year was driven by anticipation for CES 2025, the world's largest electronics and IT exhibition, a favorable U.S. Institute for Supply Management (ISM) manufacturing index, and bargain buying following previous declines. NH Investment & Securities researcher Na Jung-hwan explained, "At CES 2025, held from the 7th to the 10th, expectations for artificial intelligence (AI) were highlighted, leading to significant stock price increases in domestic semiconductor sectors related to AI, such as SK Hynix. Furthermore, as the U.S. manufacturing index, which has a high correlation with Korean exports, rebounded, foreign investor buying surged, strengthening stock prices." SK Securities researcher Jo Jun-gi added, "The U.S. ISM manufacturing index exceeded market expectations by a large margin for two consecutive months, and the semiconductor sector, which is most sensitive to this, showed exceptional strength."

Despite the positive start to the year, Samsung Electronics' preliminary Q4 results released on this day are a cause for concern. Since the beginning of the year, securities firms have been lowering their target prices for Samsung Electronics, anticipating that its Q4 performance will fall short of expectations. Shinhan Investment Corp. lowered Samsung Electronics' target price from 90,000 KRW to 77,000 KRW, Kyobo Securities from 90,000 KRW to 75,000 KRW, SK Securities from 86,000 KRW to 77,000 KRW, and Hana Securities from 95,000 KRW to 84,000 KRW. Shinhan Investment researcher Kim Hyung-tae stated, "We are revising down Samsung Electronics' Q4 sales and operating profit by 6% and 21%, respectively, to 76.1 trillion KRW and 7.5 trillion KRW," adding, "Due to the weak performance, short-term volatility is expected to increase around the announcement of the preliminary results." The Q4 sales and operating profit announced by Samsung Electronics on this day were 75 trillion KRW and 6.5 trillion KRW, respectively, falling short even of Shinhan Investment's downwardly revised figures.

SK Securities researcher Lee Dong-joo analyzed, "The overall performance and stock sentiment of semiconductor materials, parts, and equipment (SoBuJang) tend to be synchronized with Samsung Electronics. The consensus for Samsung Electronics' Q4 operating profit has dropped from the 9 trillion KRW range in November to the mid-7 trillion KRW range in the past week, and the Q1 operating profit forecast for this year has also been lowered from the mid-8 trillion KRW range to the low 7 trillion KRW range."