CXMT logo and Chinese flag are seen in this illustration taken April 14. Reuters-Yonhap

Korean stocks led the global semiconductor rally over the past year, but the momentum is shifting toward China as shares of the country's two biggest chipmakers pull back, analysts said Monday.

The TIGER China Semiconductor FACTSET ETF (exchange-traded fund), which tracks large-cap Chinese semiconductor companies, gained 49 percent in the three months through Thursday, making it the best performer among three Korea-listed semiconductor ETFs managed by Mirae Asset Global Investments, according to the Korea Exchange.

That compared with a 33.6 percent gain for the TIGER U.S. Philadelphia Semiconductor ETF and 19.9 percent for the Korea-focused TIGER Semiconductor ETF.

The Korean fund remained the top performer over the past year, surging 253.3 percent. The China-focused fund rose 154.8 percent, while its U.S. counterpart gained 132.4 percent.

Analysts said the shift toward China reflects fresh inflows as Korean semiconductor shares pause after a sharp rally. Funds have sharply flowed out of Samsung Electronics and SK hynix this month even as both companies continue to post record earnings.

"The core investment case still looks solid ... Our bigger concerns sit around positioning and market dynamics. Korea has become a crowded trade, so any uncertainty around AI (artificial intelligence) expectations or the macro backdrop could have an outsized impact on performance," Herald van der Linde, head of Asia-Pacific equity strategy at HSBC, wrote in an equity strategy report Thursday.

"With investor fatigue mounting toward AI bellwethers in Korea and Taiwan, China's AI value chain is emerging as a new alternative," said Aiden Shin, an analyst at Shinhan Securities.

CXMT'S planned 66.6 billion yuan ($9.8 billion) initial public offering has also boosted sentiment toward Chinese semiconductor stocks, with demand reaching 212 times the shares on offer. The company is China's largest DRAM producer and the world's fourth-largest.

CXMT plans to increase monthly wafer capacity to 350,000 units by year-end and 500,000 by the end of 2028. Morgan Stanley expects China to account for about 30 percent of the net increase in global DRAM wafer capacity through 2028, second only to Korea.

In a June 29 investment strategy note, Mirae Asset Securities analyst Park Soo-jin advised investors to look beyond U.S. and Korean memory-chip makers and consider increasing exposure to China's semiconductor value chain.

"Chinese memory chip makers remain limited in their competitiveness," Park said. "Still, their role in the global supply chain is likely to grow gradually as structural shortages driven by rising AI investment converge with Beijing's push for semiconductor self-sufficiency and continued capacity expansion."

CXMT's ability to disrupt the global memory market and support the momentum in Chinese semiconductor stocks will depend on its competitiveness in high-bandwidth memory (HBM), analysts said. The company remains behind industry leaders SK hynix, Samsung Electronics and Micron in HBM, a key component in AI accelerators.