Korean Retail Investors Pivot to Japanese Semiconductor Supply Chain
Retail investors are shifting capital from Japanese financial stocks to tech equipment and materials as AI infrastructure demand expands.
South Korean retail investors are aggressively shifting capital toward the Japanese semiconductor supply chain. This pivot marks a strategic move away from financial assets as investors bet on the broader expansion of AI infrastructure.
According to the Maeil Business Newspaper, these investors—often referred to as "Ilhak ants"—heavily targeted Japanese companies specializing in electronic components, materials, and equipment between August 3 and 14. During this window, Murata Production Company emerged as the top net purchase, totaling $5,319,242. The concentration in tech was stark: six semiconductor and electronic parts-related stocks or ETFs accounted for 73% of the top 10 net purchases. Other significant investments included Tokyo Electron ($2.26 million), Arisawa Manufacturing ($2.13 million), and Micronix ($2.09 million). Additionally, the Global X Japan Semiconductor ETF ranked 10th in net purchases with $1,167,523.
A Shift in Strategy
This movement represents a sharp reversal from July, when South Korean retail portfolios were dominated by Japanese financial stocks. Mitsubishi UFJ Financial Group (MUFG), which led net purchases in July, plummeted out of the top 50 net purchases by mid-August. The transition was triggered by a rebound in semiconductor stocks both domestically in Korea and internationally, prompting investors to rotate back into the technology sector.
The AI Infrastructure Play
The surge is driven by the belief that AI investment will yield benefits beyond High Bandwidth Memory (HBM), extending into NAND flash and Solid State Drives (SSDs). This thesis was bolstered on August 12, when Kioxia and SanDisk unveiled 9th generation 2-bit QLC 3D flash memory technology designed for AI and data-intensive applications. SanDisk further supported this growth narrative by presenting an average annual growth target of sales in the mid to late 10% range for fiscal 2028-2030, citing high bandwidth flash (HBF) for AI inference as a primary engine.
Market Implications
By targeting the Japanese supply chain, Korean investors are diversifying their exposure to the semiconductor cycle. Rather than relying solely on domestic giants like Samsung and SK Hynix, they are capturing value from the essential equipment and materials provided by Japanese firms. This indicates a high risk-appetite and a specific bet on the "AI inference" stage of infrastructure development.
What to Watch
Market volatility remains a factor; for instance, Kioxia shares rebounded approximately 16% by August 14 after a steep 48% plunge in July, which led some investors to engage in profit-taking sales. Observers will now watch if this trend toward the broader supply chain persists or if investors return to the stability of financial stocks should the semiconductor rebound stall. Currently, the momentum remains strong, with 12 of the top 20 net purchases this month—including Fujikura and Renesas Electronics—linked to the semiconductor ecosystem.