Temasek is planning direct investments into South Korea’s memory chip leaders Samsung Electronics (KRX: 005930) and SK Hynix (KRX: 000660), leading to both stocks increasing by nearly 10% on the news. This was off the back of a sell-off in July after a long rally.
However, Temasek clarified that it first invested in both Samsung Electronics and SK Hynix over two years ago in mid-2024 and the current plans reflect Temasek’s ongoing portfolio rebalancing within the AI hardware supply chain rather than a brand-new position entry.
While the exact investment quantum was not disclosed, Temasek has explicitly stated a goal to expand its overall AI-related holdings from 6% to up to 15% of its total S$518 billion portfolio over five years, which amounts to nearly S$80 billion.
Should you follow Temasek?
Following a sovereign wealth fund’s moves requires considering external factors as well as factors peculiar to your portfolio.
Media headlines often report these investments long after execution. Chasing news spikes risks buying at short-term highs. However, in this case, it was said that Temasek was just planning the investments and we are left unsure if Temasek would still do so with the same investment size at this higher price point.
Temasek’s published investment approach focuses on building a resilient, forward-looking portfolio to deliver sustainable long-term returns above its risk-adjusted cost of capital. Guided by its T2030 strategy, Temasek operates on commercial principles and structures its operations around major structural trends like digitization and sustainability.
Temasek operates on a multi-year/decade horizon with dynamic rebalancing capabilities and cash flows from other assets to absorb cyclical downturns. It’s worth highlighting to individual investors/readers that memory semiconductors have always been and may remain a highly cyclical sector.
Temasek categorises its portfolio into three broad categories, namely:
- Singapore-based portfolio companies – 40% of portfolio with names such as Singtel and DBS
- Global Direct Investments – 40% of portfolio. These are investments made directly by Temasek and include names ranging from Adyen to Ping An. See here for major investments
- Partnerships, funds and asset management companies – 20% of portfolio. Very simply, these are investments into funds rather than direct positions
Temasek’s public tech holdings are part of a globally diversified portfolio (including unlisted growth assets and defensive core Singapore stalwarts) and managed by investment professionals within Temasek’s risk and return mandates. A retail investor cloning individual stock picks lacks all of this as well as a broader diversification cushion.
Temasek’s tech track record
| Company | Initial Investment Date | Estimated Capital / Stake | Current Status | Performance / Gain & Loss Details |
|---|---|---|---|---|
| Alibaba | 2011 | $50m early stake | Partially Divested / Holding | Substantial multi-fold early gains, though recent years pared down due to China’s regulatory headwinds |
| Tencent | 2014 or earlier | Less than 1% of Tencent | Current holding | Also likely multi-fold early gains |
| Nvidia | Pre-2021 | Position scaled via 13F allocations | Holding (Core AI position) | Benefited directly from the multi-year AI hardware expansion. |
| TSMC | Pre-2023 | Public equity allocation | Holding | Position expanded as part of the primary semiconductor value chain strategy. |
| DoorDash | 2018–2019 (Pre-IPO) | Series H / Pre-IPO venture round | Trimmed / Holding | Acquired at private market valuation before the 2020 IPO surge, yielding substantial capital growth. |
| Didi Global | June 2021 (US IPO) | ~$466M initial allocation | De-listed / Restructured | Unrealized Loss (>50%): Impacted by Chinese regulatory actions and cybersecurity reviews shortly after the US listing. |
| FTX | Oct 2021 – Jan 2022 | $275 Million total capital | Fully Written Off | -100% Loss ($275M): Entire investment written down to zero following corporate collapse and fraud revelations. |
Temasek’s track record in overseas tech spans massive long-term compounders, timely cyclical exits, and high-profile write-downs. Temasek does have a track record of getting in early. It also does not seem to be in its strategy to sell off companies that are of global scale or positioned with structural tailwinds such as Tencent, in spite of recent market volatility in stock prices.
The market reaction to reports of Temasek’s positioning in Samsung Electronics and SK Hynix highlights several points.
While graphics processing units (GPUs) like Nvidia’s get the most attention, High-Bandwidth Memory (HBM) is one of the critical hardware bottlenecks for AI acceleration, with SK Hynix and Samsung together controlling over 80% of the global HBM market.
Temasek’s focus indicates that it views memory hardware as an undervalued layer in the AI value chain compared to highly priced chip designers.
The news broke alongside new policy tailwinds, with South Korea having just introduced a 5 trillion won semiconductor support fund.
Closing statements
Temasek has stated a strategic goal to scale its AI-related portfolio holdings from 6% to 15% over five years. Given the size of its portfolio, a 9% shift represents tens of billions of dollars in structural capital deployment across the AI supply chain, including existing stakes in TSMC, ASML, Nvidia, OpenAI, and Anthropic.
This strategic goal serves as Temasek’s compass and is actually a very strong mandate. Given that Temasek looks for 40% of its portfolio to be global direct investments, a 15% target actually means deploying over a third of its ammo in the AI supply chain. This figure should give everyone something to think about.
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