Semiconductor leaders Samsung Electronics and SK Hynix fell sharply again despite favorable winds from the U.S. stock market. The weakness in these two stocks dragged down the KOSPI index, causing investor sentiment to contract rapidly. However, securities firms maintained their stance of recommending buy ratings and top-pick status for semiconductor stocks.
According to data from the Korea Exchange on the 3rd, as of 10:36 a.m., Samsung Electronics was trading at 241,000 won, down 21,500 won (8.19%) from the previous day. Samsung Electronics had fallen to 207,000 won on the 30th of last month but surged more than 20% the following day, partially recovering losses from its peak. It then declined today, entering a phase of consolidation.
SK Hynix also exhibited significant volatility. At this moment, SK Hynix stock is down 145,000 won (8.44%) to 1.573 million won. Hynix had reached the upper limit on the previous trading day, surpassing the 1.7 million won mark, but today it is once again in a corrective downtrend.
Stocks linked to Samsung Electronics and SK Hynix through equity or business relationships are also showing substantial declines. At this moment, Samsung Life Insurance is down over 7%, and Samsung C&T is down over 6%. SK Square, which started the session with strength, has turned weak by over 1% in the early trading hours.
The stock price decline of Samsung Electronics and SK Hynix is triggering a broader market shock. This is because these two stocks account for nearly half of the KOSPI's weight. At this moment, the KOSPI stands at 6,278.99, down 316.46 points (4.80%) from the previous day. After collapsing below the 5,600 level on the 30th of last month, the KOSPI had approached the 6,600 level the day after the two stocks surged sharply but fell to the 6,200 range during today's trading session.
Due to this unprecedented volatility in the KOSPI market, the favorable winds from the U.S. New York stock market did not reach Korea. Amazon and Microsoft, which reported strong earnings, rose 15.32% and 3.02%, respectively, on the 31st (local time). The strong performance of these two tech giants alleviated investor concerns about AI investments, pushing the Dow Jones Industrial Average up 276.97 points (0.53%) and the NASDAQ Composite Index up 251.68 points (1.00%), both on the same day.
Regarding today's correction, the financial investment industry attributes it to profit-taking after the previous day's sharp surge and concerns over liquidation of yen carry trades. At the same time, analysts observed that as investors shifted from individuals to foreigners in Samsung Electronics and SK Hynix following the previous day's rally, supply and demand dynamics are moving toward stabilization. As of the previous trading day, foreign ownership stood at 46.70% for Samsung Electronics and 51.22% for SK Hynix.
Kim Dong-won, a researcher at KB Securities, stated, "The massive AI data center investment expected to continue for at least three years will lead to increased demand for memory and AI substrates, creating a chain domino effect where demand for core AI components rolls over annually and is projected to persist for the next three years." He added, "Considering the heightened possibility of large-scale shareholder returns from Samsung Electronics and SK Hynix in the third quarter, current stock prices reflect excessive undervaluation. We recommend Samsung Electronics, SK Hynix, Samsung Electro-Mechanics, and LG Innotek as top-pick stocks within the AI semiconductor sector."
Choi Bo-young, a researcher at Kyobo Securities, said, "In the short term, liquidity tightening and deterioration in free cash flow (FCF) will pressure valuations. However, in the long term, the pace at which existing business revenues from cloud services and advertising absorb investment costs will determine stock price direction." He noted, "The point at which AI investments fail is not when demand disappears, but when capital markets stop waiting before profits materialize."
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