Korea Investment Management Launches KIM ACE Global AI Custom Semiconductor ETF Tracking the Solactive AI Custom Semiconductor Index

Solactive is pleased to announce another collaboration with Korea Investment Management. The KIM ACE Global AI Custom Semiconductor ETF aims to track the Solactive AI Custom Semiconductor Index, offering investors exposure to the custom semiconductor sector, mainly focusing on companies that are at the forefront of AI-driven technological advancements. 

The global AI industry has been experiencing exponential growth, driving demand for specialized semiconductors tailored to meet the unique requirements of AI-powered devices and systems. As AI continues transforming industries worldwide, it necessitates the development of custom chips like application-specific integrated circuits (ASICs) and other chipsets that offer higher efficiency and enhance AI performance. ^[1] The AI semiconductor market is projected to reach at least $110 billion by 2027, according to market outlook reports, highlighting the substantial growth potential in this niche sector. ^[2]

The Solactive AI Custom Semiconductor Index is designed to track the performance of companies involved in custom semiconductor design, development, and manufacturing, which are crucial for optimizing AI applications. The index includes U.S. and Taiwanese-listed securities that meet specific market capitalization and liquidity criteria. The index selection utilizes a granular industry classification framework to screen specialized semiconductor companies, followed by using ARTIS®, Solactive’s proprietary natural language processing technology. This advanced algorithm identifies companies with significant involvement in the custom semiconductor sector. The index constituents are weighted according to share class market capitalization with a weight cap for individual constituents at 20% cap to ensure diversification and avoid overconcentration. 

The ETF listed on 22 October 2024 on the Korea Stock Exchange with the ticker code 494340.KS.

Timo Pfeiffer, Chief Markets Officer at Solactive, commented:“We are pleased to expand our collaboration with Korea Investment Management with the launch of the KIM ACE Global AI Custom Semiconductor ETF. The Solactive AI Custom Semiconductor Index reflects not only the growing importance of custom semiconductors in powering AI technologies but also highlights our commitment to providing innovative and relevant index solutions that align with the future trends of technology.”

Yongsoo Nam, Managing Director and Head of ETF Management at Korea Investment Management, commented: “Companies are now developing their AI services, leading to a growing demand for AI custom semiconductors (ASIC) that enhance the efficiency of AI performance. The KIM ACE Global AI Custom Semiconductor ETF is designed to focus on key companies driving the rapid growth of the ASIC industry. We believe this ETF will offer investors a unique opportunity with a portfolio that reflects the latest trends in the AI sector.”

^{[1] Generative AI: The next S-curve for the semiconductor industry?}

^{[2] Gen AI chip demand fans a semi tailwind … for now}