Samsung Electronics and SK Hynix rebounded on Friday. However, the decline over the past seven trading days has not been fully recovered. Investor sentiment appears subdued as forecasts suggest that debt burdens for AI investment will expand due to rising interest rates. The securities industry interpreted this situation as highlighting the value appeal of the semiconductor sector.
As of 10:14 a.m., KOSPI heavyweight Samsung Electronics was trading at 215,250 won, up 5,250 won (2.50%) from the previous day. Samsung Electronics had fallen 10.56% the previous day to record a price in the 200,000-won range before rising again on this day. However, excluding the gain of 1.08% recorded between October 6 and the 14th, the stock is down 25.59%.
SK Hynix, which along with Samsung Electronics forms the semiconductor duopoly accounting for a significant portion of KOSPI market capitalization, is also showing a similar trend. SK Hynix was trading at 1,307,000 won as of this time, up 45,000 won (3.57%) from the previous day. SK Hynix had fallen for seven consecutive trading days after surpassing 1.8 million won on the 2nd, and is showing a relatively modest rise on this day.
Analysis suggests that the sharp drop in semiconductor sector stock prices reflects anxiety over AI investment. In the New York stock market, selling pressure concentrated on AI-related stocks, which had previously led market gains, continued until the 14th. The semiconductor sector was also hit as views emerged that interest rate hike concerns would burden companies expanding AI infrastructure through massive borrowing.
These concerns were partially digested in the U.S. overnight. Although the producer price index (PPI) rose significantly, the three major New York stock market indices all rebounded. On the 15th (local time), the Dow Jones 30 Industrial Average closed regular trading at 52,177.69, up 556.21 points (1.08%) from the previous day; the S&P 500 index rose 25.12 points (0.33%) to 7,744.06; and the NASDAQ Composite Index, centered on tech stocks, closed at 26,713.03, up 20.16 points (0.08%).
The securities industry is evaluating that the valuation merit of the semiconductor sector has been highlighted. They hold the view that uncertainty regarding next month's interest rate hike has been resolved in advance.
Researcher Byun Jun-ho of IBK Investment & Securities stated, "The sharp drop yesterday can be seen as already reflecting a significant portion of the possibility of U.S. interest rate hikes within the year, and from that perspective, it is highly likely to act as a factor for resolving uncertainty around the October 28 FOMC (Federal Open Market Committee) meeting."
He added, "It may take time to determine whether the noise currently being discussed regarding AI industry conditions will develop into a strong negative scenario, and there is also a possibility that such concerns will be alleviated, as well as the potential for new positive news related to AI to emerge."
Researcher Han Dong-hee of SK Securities said, "Despite the decline in the won/dollar exchange rate, Samsung Electronics and SK Hynix are having their earnings forecasts revised upward due to factors such as the worsening memory supply shortage exceeding expectations and outlooks for next year's HBM (High Bandwidth Memory) price increases."
He added, "The rebound and recovery of stock prices arise from the process in which numerous concerns generated by the stock price decline fail to materialize, rather than from new momentum, and the strength of the semiconductor industry remains ongoing."
Researcher Lee Chang-min of KB Securities said, "The shareholder return policy expected to be detailed in Samsonic's earnings conference call at the end of this month will serve as an important turning point in narrowing the extreme gap between stock prices and corporate valuation and reversing investor sentiment."
He said, "Based on next year's projected earnings, the price-to-earnings ratio (PER) is only 3.1 times for Samsung Electronics and 2.6 times for SK Hynix, indicating entry into an extremely undervalued zone at historically low levels."
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