Korea AI Capital Rotation: MLCCs and Packaging Substrates May Become the Next Key Theme
nashnova research
Hana Asset fund manager Lee Wang-seop, running a ₩748 billion fund up 77% this year, argues the AI rally is rippling outward from memory chips to capacitors and substrates — a signal that Korea's tech leadership may be shifting.
Why does this fund manager's view matter?
Lee's Hana Korea IT Fund returned 77% year-to-date, beating 99% of peers.
The outperformance came largely from an early bet on front-end chip equipment maker TES Co. — a position taken before market consensus formed.
The fund still slightly overweights Samsung Electronics and SK Hynix, but Lee has broadened exposure to the AI value chain beyond semiconductors.
Why does he see MLCCs and substrates as the next upcycle?
Lee's core thesis is a "pricing ripple effect": AI demand starts with premium products like HBM — high-bandwidth memory, a type of high-speed storage designed specifically for AI chips — and as supply tightens, the rally spills into commodity DRAM, NAND, and then components.
This means → MLCCs — multilayer ceramic capacitors, the most basic energy-storage components on a circuit board — and packaging substrates — the "base plate" that carries a chip and connects it to the board — sit on the next ring of that ripple.
In plain terms = think of a rising tide hitting high ground first, then flooding the flats. Memory chips already surged; now it's the turn of the parts surrounding them.
Is the market already pricing this in?
Samsung Electro-Mechanics, a global leader in AI substrates and MLCCs, has more than tripled this year — far outpacing memory chipmakers.
Samsung SDI has roughly doubled. Both are among Lee's top holdings.
This reflects early rotation from memory into components — but Lee believes the pricing upcycle is only just beginning.
Why is the broader Korean market falling instead?
The Kospi recently slipped into a bear market. The core reason: Korea's index is heavily dependent on Samsung Electronics and SK Hynix, and investors rushed to unwind crowded AI positions.
This means → the sell-off is not about AI logic breaking down; it is capital redistributing from two dominant names into the wider AI value chain.
Lee is also bullish on renewable energy and energy-storage suppliers, arguing that data-center power demand will keep driving earnings growth ahead of the Kospi.
What is the biggest risk to this rotation?
Lee acknowledges multiple uncertainties: persistent inflation, rising borrowing costs, and intensifying competition from Chinese chipmakers all raise questions about AI investment resilience.
He is watching two signals closely: whether Korean chipmakers' 2027 earnings estimates hold up, and whether foreign investors keep selling Korean equities after SK Hynix completes its buyback program.
In plain terms = the bull case rests on MLCC and substrate earnings upgrades continuing to materialize. The pricing story sounds compelling, but profits have to show up in the numbers — that is the make-or-break checkpoint for this rotation.
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