Semiconductors are essential: Forget past highs and rebalance your portfolio now

Summary

Park Byung-chang, CEO of MP Partners, discusses the historic intraday 10%+ drop in KOSPI, attributing it to forced unwinding of leveraged ETFs and supply-demand distortions rather than fundamental deterioration. He insists that semiconductors remain essential portfolio holdings and will lead any rebound, though their recovery pace will be slower than in H1 due to leverage regulations and a shift toward stable earnings growth. He advises investors to use the widespread selloff to rebalance portfolios, reduce semiconductor weight from extreme levels, and patiently monitor catalysts such as a Fed rate pause and geopolitical resolution that could trigger a sharp market recovery.

• KOSPI suffered an extremely rare intraday decline exceeding 10%, triggering circuit breakers.
• The selloff is driven by leveraged ETF unwinding and supply-demand distortion, not a fundamental crisis.
• Regulatory uncertainty around leverage products and repeated changes in margin requirements intensified the sell-side pressure.
• Semiconductor stocks (Samsung Electronics, SK Hynix) are deemed indispensable; they will lead the rebound but the recovery slope will be gentler.
• The market rebound is contingent on the US Federal Reserve signaling a rate pause and on easing geopolitical risks.
• Investors should now rebalance portfolios, reducing overweight semiconductor positions from H1 extremes and diversifying into other quality areas.
• The abnormal market requires patience, resisting panic, and preserving both mental and physical well-being.