Can semiconductors still be held? My view is: be a firm long-term bull, but be a short-term tactician.

Given the recent market conditions, friends holding tech stocks are probably feeling a bit down. The US stock market has been soaring for two consecutive days, but over here, we only got a gap-up opening and then got slammed right back down. Many are asking: Is the semiconductor sector done for? Has AI reached its peak?

My view is very clear: Long-term, I'm firmly bullish; short-term, it's wise to be cautious.

First, the reasons for not being bearish—there's nothing wrong with the industry trend.

This AI thing isn't just a story; it's being driven by real money. The four major US tech giants are planning to invest a combined $725 billion in AI infrastructure this year, a 77% increase from last year. To put it bluntly, it's an arms race, and no one dares to stop. The upward trend in prices for upstream memory chips hasn't broken, with DRAM contract prices expected to rise nearly 60% in Q2. SK Hynix's Q2 earnings expectations are still explosive. Plus, South Korea just announced a multi-trillion won semiconductor support plan, with the state backing it.

The fundamentals haven't collapsed, and the industry trend hasn't reversed. That's my confidence in holding onto my core positions.

But why must we be cautious in the short term? The core issue isn't the industry; it's money.

The biggest headache right now is the Korean won exchange rate. USD/KRW has surged to 1558, hitting a 17-year high. Foreign investors aren't here for charity. Even if stock prices rise nicely, currency losses can wipe out the gains. That's why foreign investors have been net sellers of Korean stocks for 9 straight days. It's not that they're bearish on AI; they're afraid of making money on stocks but losing on the exchange rate.

Add to that the fact that institutions need to rebalance portfolios and realize floating profits at mid-year, and the National Pension Service (Korean pension) is also rebalancing. These are all real pressures from capital outflows. So you see this weird phenomenon: US semiconductor stocks surge, but here we only get a brief gap-up and then it's all downhill. It's not that the logic is broken; it's that buying power has genuinely been drained.

So what to do? My strategy is to keep core positions unchanged and be flexible with floating positions.

Your core positions are your conviction holdings. Don't mess with these, because you never know when a Q2 earnings report might blow expectations away, causing a gap-up opening. Missing out on that by selling too early would be worse.

Floating positions are simpler—don't chase gap-ups. If there's a sharp drop to key levels (like around KOSPI 8200), you can pick up a bit for short-term trades, but don't get greedy. To put it plainly, the short term is about enduring. Endure until foreign capital outflows slow, until the exchange rate stabilizes, until the late July earnings season reveals the answers.

The current correction isn't the end of the world; it's a normal digestion after a big run-up. The pressure from capital flows will eventually pass, but the growth in fundamentals is real and happening.

Being a long-term optimist and a short-term cautious pragmatist might be more suitable for the current market.

$XL2CSOPHYNIX(07709.HK) $Micron Tech(MU.US) $Roundhill Memory ETF(DRAM.US) $VanEck Semiconductor ETF(SMH.US) $Semiconductor(CP00062.US)