Singapore's sovereign wealth fund, Temasek, is preparing to make its first-ever direct investment in the South Korean stock market, with a focus on Samsung Electronics and SK Hynix. The fund views these two global memory chip giants as significantly undervalued assets within the artificial intelligence value chain.
According to a report from South Korea's Asian Economy, Temasek has recently engaged with South Korean government officials regarding potential investments in Samsung Electronics and SK Hynix, and is currently assessing the optimal timing for entry. A South Korean financial regulator official noted that the share prices of these two companies have recently experienced heightened volatility following the government's approval of single-stock leveraged ETFs. It is against this backdrop that Temasek is seeking to confirm a window for capital deployment. This would mark the fund's first direct investment in the South Korean securities market.
The entry strategy involves using internal personnel for direct investment, rather than outsourcing to external asset management firms. Investment banking insiders interpret this arrangement as a sign of Temasek's strong conviction in its assessment. The fund's consistent approach is to deploy large-scale capital into industry-leading sectors with a long-term perspective.
Shares of Samsung Electronics and SK Hynix both surged more than 8% during intraday trading.
Bullish on Memory Chips, Targeting Undervalued AI Plays
According to reports, Temasek believes that within the entire AI value chain, the memory semiconductor sector is the most undervalued. The aforementioned investment banking sources pointed out that while the share prices of Samsung Electronics and SK Hynix have risen by as much as over 880% from their lows last year, Temasek remains confident in their continued upside potential.
Temasek categorizes AI semiconductors as a long-term growth area that will drive structural changes in the industry, rather than a short-term fad. Amid growing concerns of overheated AI investment and a recent cooling of market sentiment, the fund is instead increasing its overall bets on the AI value chain.
In the second quarter of this year, Temasek concentrated its investments in areas such as semiconductors, data centers, cloud computing, AI model developers, and software infrastructure. Its goal is to significantly raise the proportion of AI-related investments in its overall portfolio from the current 6% to as high as 15% within the next five years.
Already Holds Positions in NVIDIA, TSMC, and ASML
Temasek's 13F filing with the U.S. Securities and Exchange Commission (SEC) on the 7th revealed that, as of the end of June this year, the fund held shares in NVIDIA, Taiwan Semiconductor Manufacturing Company, and Dutch semiconductor lithography equipment giant ASML Holding NV. It is also a major institutional investor in generative AI developers OpenAI and Anthropic.
If the direct investment in Samsung Electronics and SK Hynix is completed, it will extend Temasek's semiconductor holdings into the memory chip segment, further perfecting its AI value chain layout.
Temasek is a state-owned investment company wholly owned by Singapore's Ministry of Finance. As of the end of March this year, its assets under management stood at 518 billion Singapore dollars.
Comments