Park Jin-ho, head of equity management at NH-Amundi Asset Management, speaks at a news conference marking the first anniversary of the Growth-Led Korea Fund held in Yeouido, Seoul, on Sept. 19. Courtesy of NH-Amundi Asset Management
The growth of the artificial intelligence industry is only now entering full swing despite the recent slide in chip stocks, a fund manager said. But with earnings estimates for Samsung Electronics and SK hynix being raised at a slower pace, investors need to broaden their exposure to suppliers of chip materials, parts and equipment, the manager said.
Choi Chi-hyun, deputy head of the second equity management division at NH-Amundi Asset Management, said on the 19th that the firm would shift part of its holdings in Samsung Electronics and SK hynix into materials, parts and equipment companies. He spoke at a press briefing marking the first anniversary of the Growth-Driven Korea Fund. Earnings estimates for the two chipmakers have been flat for two straight months, while investment in front-end chipmaking equipment is expected to increase next year, and the firm plans to seek additional returns from related companies, he said. The fund will also maintain a high weighting in substrate makers, which are expected to benefit as chip packaging grows larger and adds more layers.
The Growth-Driven Korea Fund, launched on Oct. 14 last year, invests in companies leading transformations in AI, clean energy and capital markets. Its return since inception stood at 84.86% as of Oct. 14, outpacing the KOSPI’s gain by 17.23 percentage points. About 80% of the excess return came from the semiconductor and information technology hardware sectors.
“I don’t think this is the point to dial back our focus on AI,” Choi said. “We will manage portfolio volatility through the financial and energy sectors.” The fund has added insurers, which are expected to post better insurance earnings and expand shareholder returns, along with refiners and gas companies as an inflation hedge. Choi also pointed to the potential for improved earnings at battery makers as the U.S. energy storage system market grows.
NH-Amundi also offered an upbeat outlook on the chip industry and the domestic stock market, citing rising AI demand and shareholder returns. Park Jin-ho, head of equity management at NH-Amundi, attributed the recent weakness in memory stocks to a combination of funding pressure at customers, intensifying competition and profit-taking, but said memory demand would rise as AI agents spread. “Even if the initial public offerings of OpenAI or Anthropic don’t go well, that isn’t the end of AI,” Park said. “New leaders can emerge with new business models.”
Park said confidence in the durability of chip earnings and in shareholder returns is key to a re-rating of the Korean stock market. “Combined shareholder returns at Samsung Electronics and SK hynix could reach about 300 trillion won next year,” he said. “If Samsung Electronics shows that it is keeping its shareholder return promises, a re-rating is possible.”