Hello. This is Daily Stock. We analyze the latest supply-demand dynamics and fund flows in the US semiconductor sector, the core of the global financial market.
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Executive Summary
In July 2026, the global semiconductor market experienced a historic crash, yet SOXX (iShares Semiconductor ETF), a representative ETF tracking the Philadelphia Semiconductor Index, saw a record net inflow of $6.92 billion. This indicates that contrarian dip-buying, fueled by confidence in long-term AI momentum, was stronger than ever despite the harsh market correction.
On the other hand, domestic retail investors in Korea ("Western Ants") deployed an extremely agile supply-and-demand strategy. Utilizing the 3x leveraged product SOXL, they net-purchased over $1 billion in just one week and took profits of over $600 million as soon as the index rebounded. Amidst the tight standoff between technical declines and institutional supply/demand, the volatility of semiconductor ETFs is being maximized due to the movements of short sellers like Michael Burry and the liquidation issues of AI-specialized hedge funds.
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Current Status Summary
As of the close of the New York Stock Exchange on August 6, 2026 (provisional), SOXX closed at $540.09 (+1.77%), while SMH (VanEck Semiconductor ETF), another key semiconductor ETF, finished regular trading at $569.82. Compared to July, when SOXX plummeted 22.1% to record its worst decline since 2002, the market is showing a rapid breathing spell.
The most notable feature of recent supply and demand is the record-breaking buying power unleashed during the decline. In July alone, SOXX pulled in $6.92 billion, which is close to its total inflows for the entire first half of 2026 ($7.75 billion). This proves that passive capital provided a very solid floor, even amidst hawkish interest rate freeze stances by new Fed Chairman Kevin Warsh and concerns over AI profitability.
[Image: /stdaily/uploads/202608/gen_6a752064b422e1.36517812.png]
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Financial Analysis
The fundamental pillar supporting semiconductor ETF flows is the unwavering capital expenditure (CapEx) scale of major Big Tech companies and robust chip demand. The annual AI infrastructure spending of hyperscalers like Microsoft and Amazon is estimated to be between $600 billion and $720 billion, which enhances revenue visibility for core semiconductor companies.
| Category | iShares Semiconductor ETF (SOXX) | VanEck Semiconductor ETF (SMH) |
|---|---|---|
| **Assets Under Management (AUM)** | Approx. $45.46 Billion (As of Aug 5) | Approx. $70.48 Billion (As of Aug 5) |
| **Expense Ratio (Total Fee)** | 0.33% | 0.35% |
| **Top Holdings** | NVIDIA, Broadcom, TSMC, etc. | NVIDIA (Approx. 21.19%) |
| **July Return** | -22.1% | Approx. -18% |
| **2026 Cumulative Inflows** | Approx. $14.67 Billion | Record net inflows continue |
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Valuation
Valuations of global semiconductor ETFs have cooled slightly compared to past overheated phases due to the recent short-term crash, but they still maintain high multiples. The 12-month forward price-to-earnings (Forward P/E) ratios of SMH and SOXX range from approximately 40x to 60x, leaving price attractiveness and overvaluation debates in a tight standoff.
In particular, SMH, which concentrates more than 20% of its portfolio in a single stock (NVIDIA), is directly and indirectly exposed to the performance volatility of specific Big Tech companies. Conversely, SOXX, which has a relatively even distribution due to caps on individual stock weights, is viewed more favorably in terms of defending against volatility.
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Expert and Institutional Analysis
Recently, the supply-and-demand positions in the options market and among prominent investors have taken on a more complex look. Michael Burry, the real-life model of the movie 'The Big Short', revealed through a disclosure on August 5 that he is maintaining short positions on SOXX, NVIDIA, Micron, and Applied Materials.
In contrast, large market makers, including Citadel, are focusing on the normalization process of implied volatility in the semiconductor sector relative to realized volatility. As of August 7, 2026, the index option expiration date, the expected price swing for SOXX was observed to be around ±6.8%, and large institutions are buying defensive put options to limit downside risks.
[Image: /stdaily/uploads/202608/gen_6a75206d87e842.83973275.png]
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Risk Factors
The most immediate risk is the backlash and liquidation mechanism of ultra-high leveraged funds. Recently, 'Situational Awareness', an AI-focused hedge fund managing $45 billion, failed to meet margin calls and was forcibly liquidated due to excessive leverage (up to 400%) and the semiconductor plunge in July.
In this process, block trades of about $16 billion worth of equities held by the fund flooded the market, and such forced liquidation volumes can cause sudden distortions and shocks to the ETF supply-demand network. In addition, the Fed's monetary policy path of maintaining high interest rates and antitrust regulatory actions against NVIDIA's monopoly are also factors that could trigger potential capital outflows.
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Investment Perspective Summary
* Indices & Exchange Rate (Provisional as of August 7, 2026):
* KOSPI: 6,376.93
* KOSDAQ: 805.84
* NASDAQ: 26,348.35
* USD/KRW: 1,424.50 KRW
* Daily Stock Fear & Greed Index Analysis:
* KOSPI Fear & Greed Index: Currently in the Extreme Fear (18.6) phase, continuing a long-term depressed sentiment following last week (17.8) and one month ago (12.8).
* NASDAQ Fear & Greed Index: Currently in the Neutral (59.7) phase, showing a slight recovery in sentiment compared to one week ago (40.7) and one month ago (41.7) despite the recent price correction.
Recent supply and demand for the Philadelphia Semiconductor ETF is a mix of 'greed amidst fear' and 'smart short-term capital aiming for a technical rebound.' Although long-term passive funds are responding with record-setting dip-buying, technical overhang issues such as short bets by Michael Burry and the liquidation of leveraged funds have not been fully resolved, requiring a cautious approach with a split-purchase perspective.
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Investor Checklist Q&A
Q1. What caused the historic capital inflows despite the crash of semiconductor ETFs in July?
A1. This is because capital expenditure (CapEx) plans of Big Tech companies to build AI infrastructure have not faltered, and both institutional and individual investors judged this correction as an opportunity to buy a long-term growth sector at a discount.
Q2. What are the characteristics of the supply and demand for SOXL, which is heavily traded by Korean investors?
A2. It shows an extreme short-term profit-taking tendency. During the crash in late July, they net-purchased about $1 billion, but as soon as the index rebounded temporarily in early August, they cleared their positions by net-selling about $664 million in a single day.
Q3. What is Michael Burry's recent position on semiconductors?
A3. According to the disclosure on August 5, 2026, Michael Burry still holds short positions on SOXX, Micron, NVIDIA, and Applied Materials, betting on downward pressure on semiconductor valuations.
Q4. How does the recent liquidation of the AI hedge fund 'Situational Awareness' affect supply and demand?
A4. A large fund using up to 400% leverage was forced to liquidate its $16 billion equity portfolio due to margin calls, causing temporary oversupply (overhang) in the market and increasing supply-demand instability.
Q5. Which ETF, SOXX or SMH, is more suitable for my investment style?
A5. If you want to focus on the high growth of NVIDIA, SMH, which has a high weight in NVIDIA, may be suitable, but it comes with high volatility. On the other hand, if you want a broader diversification across the semiconductor value chain and volatility control, SOXX could be an alternative.
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