Korea Investment & Securities announced that its ACE Japan Semiconductor ETF recorded the highest returns among all Japan-focused ETFs listed in Korea, with a 119.04% return over the past year and a 63.65% return year-to-date as of the prior trading day. The ETF invests in 25 core Japanese semiconductor companies, including pure NAND specialist Kioxia Holdings and firms across Japan's semiconductor materials, components, and equipment sectors. The strong performance is attributed to NAND supply shortages benefiting key holdings and Japanese government policy support for domestic semiconductor infrastructure, including trillions of yen in subsidies for the Rapidus 2nm advanced process project and TSMC's Kumamoto facility expansion.
ACE Japan Semiconductor ETF Leads Japan-Focused ETFs in Korea with 119% Annual Return
According to Korea Exchange data as of the prior trading day, the ACE Japan Semiconductor ETF recorded a 119.04% return over the past year and a 63.85% return year-to-date. These figures represent the highest performance among all 14 Japan-focused ETFs listed in Korea and significantly exceed the average returns of 43.59% and 22.18% for the respective periods across all products in this category. The ETF, which listed in October 2023, currently holds assets under management of 25.3 billion won.
As of the prior trading day, the ETF's top holdings included Kioxia Holdings (8.43%), Sumco (7.04%), Rohm (5.49%), Kokusai Electric (4.47%), and Tokyo Electron (4.43%). The product holds Kioxia at the highest weighting among all passive ETFs listed in Korea.
Kioxia Holdings Reports 15x Operating Profit Surge in Q1
Kioxia is identified as a beneficiary of recent NAND supply shortages. The company's operating profit for the January-March period increased 15 times year-over-year, marking a quarterly record high. Kioxia's operating profit guidance for the April-June period indicated a 29-fold increase compared to the same period last year.
Japanese Government Invests Trillions of Yen in Rapidus and TSMC Projects
The Japanese government is investing trillions of yen in subsidies for state-backed semiconductor firm Rapidus's 2-nanometer advanced process mass production project and the expansion of TSMC's Kumamoto facility. These government-led infrastructure support measures are benefiting Japan's domestic semiconductor materials, components, and equipment value chain.
SEMI Forecasts Global Wafer Fab Equipment Sales Reaching $200 Billion by 2028
According to the Semiconductor Equipment and Materials International (SEMI), global wafer fab equipment (WFE) sector sales are projected to reach approximately $200 billion by 2028. The expansion of AI workload production capacity and accelerating technology transitions are driving investment across the semiconductor capital equipment market.
Korea Investment & Securities Analyst Highlights Japanese Semiconductor Growth Momentum
Nam Yong-soo, head of the ETF division at Korea Investment & Securities, stated: "Japan's semiconductor industry is encountering new growth momentum through industrial restructuring, increased capital expenditure, and strengthened policy support. With the expansion of next-generation AI accelerator and high-performance computing demand, equipment replacement cycles and new facility expansions are converging, and the earnings visibility of Japan's core semiconductor materials, components, and equipment companies is projected to remain high beyond the second half of the year."
Nam added: "The ACE Japan Semiconductor ETF is a product that includes companies with high market share in the materials, components, and equipment sector where technological capability is critical. It can deliver enhanced effects when combined with ACE ETF's diverse global semiconductor lineup in portfolio construction."
FAQ
What returns did the ACE Japan Semiconductor ETF achieve over the past year?
As of the prior trading day, the ACE Japan Semiconductor ETF recorded a 119.04% return over the past year and a 63.85% return year-to-date, the highest among all 14 Japan-focused ETFs listed in Korea.
Why did Kioxia Holdings' operating profit increase significantly in Q1?
Kioxia Holdings' operating profit for the January-March period increased 15 times year-over-year, attributed to NAND supply shortages. The company's April-June operating profit guidance indicated a 29-fold increase compared to the same period last year.
How is the Japanese government supporting its domestic semiconductor industry?
The Japanese government is investing trillions of yen in subsidies for Rapidus's 2-nanometer advanced process mass production project and the expansion of TSMC's Kumamoto facility, providing infrastructure support to Japan's semiconductor materials, components, and equipment value chain.
