Why South Korea’s Semiconductor ETFs Exploded in 2025: The AI Supercycle Is Here
South Korea’s semiconductor ETFs are surging in 2025 amid massive government funding, AI-driven chip demand, and explosive inflows into Samsung’s KODE
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South Korea Is Entering a Full-Scale AI Semiconductor Boom
South Korea has entered what analysts are calling a once-in-a-generation semiconductor supercycle, powered by the rapid expansion of AI infrastructure worldwide. The impact is so strong that several Korea-listed semiconductor ETFs—especially those under Samsung Asset Management—have recorded surging AUM, massive inflows, and multi-month performance highs.
The boom is not just investor speculation. It is backed by historical levels of government funding, tech-industry expansion, and global AI hardware demand.
₩50 Trillion National Strategic Fund Sparks Market Rally
The turning point came when South Korea announced an unprecedented funding initiative of ₩50 trillion (USD 34B) to supercharge its semiconductor and high-tech industries. This package is aimed at strengthening Korea’s global leadership in AI chips, memory, and advanced manufacturing.
This major economic program was officially confirmed by Reuters, which reported that
➡ South Korea is preparing a USD 34 billion fund to support national strategic industries
(Reuters source: https://www.reuters.com/markets/asia/south-korea-prepares-34-bln-fund-national-strategic-industries-2025-03-05/)
Local confirmation also came from KBS World, which reported that
➡ the government will establish a KRW 50 trillion fund dedicated to high-tech innovation
This massive liquidity injection triggered a surge of investor interest—particularly into semiconductor ETFs.
KODEX Semiconductor ETF Breaks the ₩1 Trillion AUM Threshold
According to a detailed report by Asiae,
➡ Samsung Asset Management’s KODEX Semiconductor ETF surpassed ₩1 trillion in assets under management for the first time.
(Asiae source: https://cm.asiae.co.kr/en/article/2025101308560826677)
This milestone reflected:
Strong retail accumulation
Institutional inflows reacting to AI-driven chip demand
Broader investor confidence in Korea’s semiconductor leadership
The ETF includes major Korea semiconductor giants and suppliers that are essential for AI server manufacturing, making it one of the best-positioned funds for the AI era.
Leverage ETFs Explode as Traders Chase the AI Supercycle
Interest also surged in Samsung’s leveraged semiconductor ETF products, which offer amplified exposure to chip stocks.
The 2× leveraged semiconductor ETF (profile here):
➡ Cbonds ETF profile: https://cbonds.com/etf/231611/
Local media reported that leveraged semiconductor ETFs saw:
Double-digit trading volume increases
Strong inflows from active traders
Rallies driven by AI server/AI memory demand
This aligns with global trends. As AI models scale (GPT-type LLMs, robotics, autonomous systems), the demand for HBM memory, AI GPUs, and AI-related foundry production hits record levels—benefiting Korea directly.
Government Support for Chipmakers Reaches New Record
As AI geopolitics intensifies, South Korea has been proactive about protecting and accelerating its semiconductor dominance.
Reuters confirmed another major package:
➡ USD 23 billion in support for chipmakers amid rising U.S.–China trade tensions
(Reuters source: https://www.reuters.com/technology/south-korea-unveils-23-billion-support-package-chips-amid-us-tariff-uncertainty-2025-04-14/)
This includes:
Tax benefits
Financing support
Infrastructure expansion
Incentives for domestic chip R&D
These actions further extended investor confidence—magnifying the ETF rally.
Why These ETFs Are Exploding Now (2025 Key Drivers)
1. Global AI Infrastructure Demand
AI data centers require:
AI GPUs
HBM memory
Advanced packaging
Power-optimized semiconductors
Korea supplies many of these components at scale.
2. Government Megafund + Policy Support
The combination of:
₩50T national strategic fund
₩30T+ chip support packages
Corporate tax incentives
is unprecedented in Korea’s history.
3. Retail Investor Momentum
South Korean retail participation in ETFs reached multi-year highs, and semiconductor ETFs remain among the most actively traded products.
4. AI Supercycle (2025–2028)
Industry analysts expect this cycle to be bigger than the smartphone boom.
Investors see Korea as one of the biggest beneficiaries.
Conclusion: Korea’s Semiconductor ETFs Are Riding a Multi-Year Wave
The explosive growth of South Korea’s semiconductor ETFs in 2025 is not a temporary hype cycle—it's the result of:
Massive government funding
Historic chip-industry expansion
AI-driven global semiconductor demand
Strong local investor confidence
With the world shifting toward AI-powered everything, Korea’s semiconductor industry is entering one of its strongest eras yet—making its ETFs some of the most-watched on the Asian markets.
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Writer @Erlin
Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.
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