Norway's massive sovereign wealth fund, NBIM, has notably adjusted its South Korean stock portfolio for the latter half of 2025.
The fund's strategy hinges on a dual narrative: capturing the AI-driven memory semiconductor supercycle while betting on the tangible strength of Korea's key export industries. This led to a clear divergence in its approach to the country's two semiconductor giants. NBIM increased its stake in Samsung Electronics, while trimming its position in SK hynix.
So, why the split decision? First, let's look at the semiconductor landscape. Both companies reported record-breaking earnings, propelled by soaring global demand for HBM and other advanced memory chips. This boom was confirmed by Korea's stellar export growth, which provided a strong macroeconomic tailwind. However, the narratives for each company differed significantly. SK hynix had an incredible run in 2025, solidifying its position as the leader in the HBM market. This success, however, led to a rapid rise in its stock price, prompting concerns about an overheated valuation. For a long-term investor like NBIM, this was a logical point to take some profits off the table.
On the other hand, Samsung Electronics presented a compelling 'recovery' story. After facing some challenges with its HBM3E validation in 2025, the company signaled a strong comeback with its roadmap for HBM4 and posted record-high quarterly profits. This suggested that Samsung was poised to reclaim market share, making it a safer bet on 'certainty' and long-term value, even at a historically high P/E Ratio.
Beyond semiconductors, NBIM also doubled down on sectors with clear, long-term visibility. The shipbuilding industry, for instance, is benefiting from a massive order book for high-value vessels like LNG carriers, where Korean companies hold a dominant market share. Similarly, the defense sector is thriving, with a growing pipeline of export deals to countries in Europe and the Middle East. NBIM strategically leverages local expertise by delegating investments in these areas and in promising small-cap stocks to specialized external fund managers in Korea.
This carefully calibrated approach—securing a core position in a recovering industry leader, taking profits from a high-flyer, and making targeted bets on sectors with strong fundamental tailwinds—explains NBIM's thoughtful and nuanced rebalancing in the dynamic Korean market.
- HBM (High Bandwidth Memory): A high-performance DRAM semiconductor used in AI accelerators like GPUs. It features multiple DRAM chips stacked vertically to significantly increase data processing speed.
- NBIM (Norges Bank Investment Management): The organization that manages the Government Pension Fund of Norway, one of the world's largest sovereign wealth funds.
- P/E Ratio (Price-to-Earnings Ratio): A valuation metric calculated by dividing a company's stock price by its earnings per share (EPS). It is used to gauge whether a stock is overvalued or undervalued relative to its earnings.