First semiconductor ETF targeting Chinese and S.Korean chipmakers debuts in SSE
The first semiconductor exchange-traded fund (ETF) in the Chinese mainland tracking big chipmakers in China and South Korea officially started trading on the Shanghai Stock Exchange (SSE), while four co-indexed ETFs listed on the Korea Exchange (KRX), the SSE announced on Thursday in a statement.
It is the first cross-border ETF for investors from the Chinese mainland investing in the Korean market, as well as the first ETF co-indexed by the two countries. The debut of the ETF will further deepen the bilateral cooperation in capital markets and promote the development of industrial and supply chains while serving the real economy, Wang Hong, deputy general manager of SSE said in the statement.
The ETF offers Chinese mainland investors access to stocks of renowned chipmakers such as Samsung Electronics, SK hynix along with other firms, Shanghai Securities News reported.
Wang said that China and South Korea jointly launched three indices in December 2021 targeting major players from the two countries, the semiconductor and the new-energy vehicle sectors.
KRX chairman Son Byung-doo was quoted as saying in the SSE statement that the Chinese and Korean semiconductor industries hold a pivotal position in the global market, and international investors will continue to increase their investments in quality semiconductor companies in both countries.
South Korea remains a major player in the semiconductor industrial chain globally, occupying 70 percent of global market share, according to the China Fund newspaper.
The report from China Fund said that the technological advantages in advanced process chip manufacturing and memory chip production from South Korea can effectively compensate for the shortcomings of China's semiconductor industry, while China is the largest export market for South Korea's semiconductor industry. There is a huge cooperation potential between the two countries due to the high complementarities throughout related supply chains.
China has been stepping up efforts to continuously invest and develop in the semiconductor industry. The State Council, China's cabinet, has implemented a range of measures covering finance, tax, research, trade and other aspects since 2020, aiming to promote the high-quality development of the integrated circuit industry and software industry, according to a notice issued by the State Council.
As of the end of November 2022, a total of 468 ETF products have been listed on the SSE and the ETF market size exceeded 1.2 trillion yuan ($171.89 billion), accounting for about 80 percent of the domestic market. The turnover of ETF products on the SSE is about 16 trillion yuan, ranking first in Asia, the SSE said on its website.