Jensen Huang: "Semiconductor sales to double next year"... KOSPI overcomes shock of interest rate hike

The KOSPI overcame the shock of the U.S. base rate hike within a single day. This is due to falling yields on long-term U.S. Treasury bonds and declining international oil prices, as well as NVIDIA CEO Jensen Huang's forecast that semiconductor sales next year will double compared to this year. It remains to be seen whether Huang's remark will lift semiconductor stocks and the KOSPI, which had been hesitant amid arguments for slowing down AI development.

As of 11:08 a.m. on the 18th, the KOSPI was trading at 6,848.25, up 132.84 points (1.98%) from the previous day.

Despite the Federal Reserve System's (Fed) base rate hike on the 16th (local time), the KOSPI opened higher that day. This is because uncertainty regarding the Fed's policies eased following the conclusion of the September Federal Open Market Committee (FOMC) meeting. Additionally, news emerged that President Donald Trump would hold meetings with leaders from Gulf countries next week, leading to declines in U.S. long-term Treasury yields and international oil prices.

Amid a more favorable environment for the stock market, Huang's remarks stimulated investment sentiment in semiconductor stocks. Ahead of his attendance at an AI summit held in Scotland hosted by King Charles III on the 17th (local time), Huang told reporters, "We expect NVIDIA to sell twice as many chips next year compared to this year," adding, "This is because AI is making a very significant contribution to various industries and the economy."

Domestic and foreign semiconductor stocks, which had been hesitant due to high interest rates and arguments for slowing down AI development, surged in unison following Huang's remark.

At the current time, Samsung Electronics is trading at 250,875 won, up 6,250 won (2.48%) from the previous day. SK Hynix is trading at 182,000 won, up 75,000 won (4.3%). Semiconductor stocks also rose in last night's New York market. SK Hynix American Depositary Receipts (ADRs) jumped 4.64%, Micron rose 5.5%, Intel surged 7.7%, and Qualcomm climbed 2.1%.

Experts in the financial investment industry analyzed that despite the high-interest-rate environment, semiconductor demand remains robust as predicted by Huang's remarks.

Kim Dong-won, head of research at KB Securities, stated, "Although the yield on 20-year long-term bonds has reached levels between 6.0% and 7.5%, we estimate that the volume of bond issuance by U.S. hyperscalers for AI infrastructure investment from January to September this year increased eightfold year-on-year to 337 trillion won." He added, "This indicates that investors expect to recover their investments within a few years through increased profits generated in AI cloud and AI services, even if they accept high financing costs, which is driving expanded investment." He further said, "The biggest beneficiaries of AI demand, which is stronger than interest rates, are Samsung Electronics and SK Hynix."

Analyses also suggest it is unlikely that a general reduction in industry-wide investment will occur due to the recently raised arguments for slowing down AI development. This is because it is realistically difficult for all companies to agree on simultaneously adjusting their development speeds. In particular, given that the United States and China are engaged in a technological hegemony competition, the prevailing view is that there must be a gap between any agreement on joint slowdowns and their actual implementation.

Lee Jae-won, a researcher at Yuanta Securities, explained, "It is difficult to definitively conclude that recent semiconductor corrections signal a reduction in AI investment until actual order declines are confirmed," adding, "We maintain our top preference opinion for large-cap semiconductor stocks and the KOSPI from a strategic perspective."

The researcher also said, "Profit differentiation continues even within IT (information technology). Samsung Electronics is scheduled to pay cash dividends of approximately 30 trillion won in the third quarter, and SK Hynix has announced plans to unveil additional shareholder return policies following its 40 trillion won share buyback and cancellation." He concluded, "Responses centered on semiconductor stocks, where earnings and shareholder returns will be confirmed around the Chuseok holiday period, are effective."