Global semiconductor exchange-traded funds have attracted $24.7 billion in new capital since June 22 despite suffering declines ranging from 20% to 61% from their peaks. According to ETF.com on July 17 (US local time), investors are treating the sharp downturn as a buying opportunity rather than a sell signal. The inflows occurred amid market concerns that China's new open-source AI model Kimi K3, which analysts say can compete with US Big Tech models, may reduce AI infrastructure investment costs similar to the earlier DeepSeek shock. However, investors appear to believe the broader trend toward AI infrastructure buildout remains intact.
Four Major Semiconductor ETFs Record $24.7 Billion Inflows Despite 20-61% Declines
The Roundhill Memory ETF (AMS:DRAM) fell approximately 40% since its June 22 peak, while the iShares Semiconductor ETF (NAS:SOXX) declined 24%. The 3x leveraged product SOXL (AMS:SOXL) plunged 61%, and the VanEck Semiconductor ETF (NAS:SMH) dropped 20% during the same period.
Despite these declines, the four major semiconductor ETFs received a combined $24.7 billion (approximately 36 trillion won) in new capital. The DRAM ETF attracted $8.8 billion, SOXX and SOXL drew $8.5 billion and $5.1 billion respectively, and the VanEck Semiconductor ETF secured $2.3 billion in inflows.
DRAM ETF Assets Remain Near Peak Levels as Inflows Offset Price Decline
The DRAM ETF's assets under management stood at $23.4 billion, only slightly below the June-end peak of $25.9 billion, despite the nearly 40% price decline. The analysis indicates that newly inflowed capital offset most of the market decline.
Investors View Kimi K3 AI Model Concerns as Temporary Amid Continued Infrastructure Demand
Concerns have spread that AI infrastructure investment costs could decrease following the emergence of China's new open-source AI model Kimi K3, which has been assessed as competitive with US Big Tech models, similar to the earlier DeepSeek shock. However, analysts note that investors view the recent sharp decline as a buying opportunity rather than a sell signal, believing that the broader trend of AI infrastructure construction remains unchanged.
FAQ
What happened to semiconductor ETFs since June 22?
Four major semiconductor ETFs declined between 20% and 61% from their June 22 peaks, with SOXL falling 61%, DRAM dropping 40%, SOXX declining 24%, and SMH falling 20%. During the same period, these ETFs attracted a combined $24.7 billion in new capital inflows.
Why are investors buying semiconductor ETFs despite the price declines?
According to the analysis, investors are treating the recent sharp decline as a buying opportunity rather than a sell signal. They believe the broader trend toward AI infrastructure buildout remains intact despite concerns that China's Kimi K3 AI model could reduce AI infrastructure investment costs.
How did new inflows affect the DRAM ETF's asset size?
The DRAM ETF's assets stood at $23.4 billion, only slightly below the June-end peak of $25.9 billion, despite the nearly 40% price decline. The $8.8 billion in new capital inflows offset most of the market decline during this period.
