Park Seok-hyun, Deputy General Manager of Woori Bank's WM Products Division, advised in an interview on the 10th that investors should temporarily increase risk asset allocation beyond the traditional 60/40 stock-bond ratio, specifically raising semiconductor exposure. Park attributed this shift to unprecedented AI investment by US Big Tech companies, which has elevated global semiconductor dependence and driven Korea's export and corporate profit growth. He emphasized that investors must revert to traditional portfolio allocation once the AI investment trigger changes. Korea's June exports reached $102.2 billion, up 70.9% year-over-year and marking a record high, with approximately half attributed to semiconductors, while the semiconductor share of KOSPI listed companies' operating profits surged from 38% early this year to 72% currently.
Korea Semiconductor Exports Hit Record $102.2B in June
Korea's June exports totaled $102.2 billion, representing a 70.9% increase compared to the same month last year and setting a new record. Approximately half of this export volume is estimated to come from semiconductors. Through May, the cumulative semiconductor share of total exports reached approximately 40%, nearly double the 24% recorded last year. Park noted that this semiconductor-driven export surge has contributed to the country's GDP growth and economic recovery, supported by government policy measures.
KOSPI Operating Profit Forecast Revised Upward by 520 Trillion Won
The operating profit forecast for KOSPI listed companies was revised from 427 trillion won early this year to 943 trillion won currently, an upward adjustment of approximately 520 trillion won. Park explained that this entire increase is attributable to the semiconductor sector, as semiconductor operating profit forecasts rose from 163 trillion won to 680 trillion won during the same period — also a 520 trillion won increase. The semiconductor share of total KOSPI operating profits expanded from 38% early this year to 72% now. Park stated that the combined operating profit forecast for all other sectors excluding semiconductors remained unchanged between early this year and the present.
Woori Bank Economist Recommends Raising Semiconductor Allocation
Park advised that the current market phase requires investors to accept higher risk in exchange for returns, even at the cost of short-term stability. He stated, "It is now a phase where we need to shift focus away from the absolute principle of 60/40 asset allocation," and recommended increasing the proportion of risk assets, particularly semiconductors, beyond traditional portfolio ratios. He clarified that this strategy is appropriate as long as the current trigger — unprecedented AI investment by US Big Tech companies — remains in place. Park emphasized that if this trigger changes, investors must return to traditional portfolio allocation.
Park identified prolonged global inflation following the COVID-19 pandemic as another factor disrupting traditional asset allocation principles. He noted that the US Federal Reserve's repeated delays in reaching its 2% inflation target have made it difficult for major central banks to lower interest rates, placing sustained pressure on bond markets. He explained that the combination of prolonged inflation and extreme profit concentration in specific industries has driven even traditionally conservative investors into equity markets.
Portfolio Reversion Depends on US Big Tech Capex Changes
Park specified that investors should revert to traditional portfolio allocation when changes are detected in the investment behavior of US Big Tech companies. He warned that if these companies shift toward reducing investment, market conditions could change rapidly. Park cautioned against dismissing recent market volatility triggered by Meta's potential AI investment reduction as "mere noise," describing it as "the most important change factor among events in the past year." He noted that while Meta neither confirmed nor denied whether AI computing investment is excessive, the issue is significant because it could affect the core trigger.
Park identified two key variables to monitor in the second half: the sustainability of AI investment and the Federal Reserve's policy direction. He stated, "As US Big Tech and hyperscalers approach their earnings announcement period, it is necessary to confirm whether they will continue current AI investment through their capital expenditure (CAPEX) plans." He added that whether the Fed proceeds with rate cuts as the market currently expects, or whether inflation changes cause policy adjustments, will also be a crucial factor.
FAQ
Why did Park Seok-hyun recommend increasing semiconductor allocation beyond the 60/40 ratio?
Park attributed the recommendation to unprecedented AI investment by US Big Tech companies, which has elevated global semiconductor dependence and driven Korea's export and corporate profit growth. He advised that the current market phase requires accepting higher risk for returns, as long as the AI investment trigger remains in place.
What data supports the increased focus on semiconductors in Korea's economy?
Korea's June exports reached $102.2 billion, up 70.9% year-over-year, with approximately half from semiconductors. The cumulative semiconductor share of exports through May was approximately 40%, nearly double last year's 24%. KOSPI operating profit forecasts were revised upward by 520 trillion won, entirely attributable to semiconductors, with the sector's share of total KOSPI profits rising from 38% early this year to 72% currently.
When should investors revert to traditional portfolio allocation according to Park?
Park stated that investors must revert to traditional allocation once the AI investment trigger changes. He specified that changes in the investment behavior of US Big Tech companies, such as reductions in capital expenditure on AI, would signal the need for portfolio reversion.
