Should You Buy SK Hynix Stock Now?

Concerns Over Memory Semiconductor Market Deterioration Already Reflected... Experts Say "Could Be a Buying Opportunity"

[Asia Economy Reporter Eunmo Koo] SK Hynix appears to be shaken, temporarily losing its position as the second-largest company by market capitalization since March 2017 amid a worsening outlook for the memory semiconductor industry. However, since much of the potential negative factors have already been reflected, the possibility of further stock price declines is considered relatively low.

According to the Korea Exchange on the 24th, SK Hynix's stock price closed at 74,500 won on the 21st, up 3.76% (2,700 won) from the previous trading day. SK Hynix recorded a market capitalization of 54.2362 trillion won, reclaiming the second place it had lost the day before to Samsung Biologics (52.8658 trillion won) in just one day.

SK Hynix has shown a sluggish stock price trend, falling for seven consecutive trading days until the 20th. Recently, the decline in SK Hynix's stock price has been led by foreign investors. Foreign investors have net sold SK Hynix shares worth 619.9 billion won through the 21st of this month, making it the most sold individual stock. In contrast, individual investors have net bought shares worth 1.1167 trillion won during the same period, absorbing the selling pressure from foreigners and institutions.

The recent poor performance of SK Hynix's stock price is due to concerns that the memory semiconductor market, including its main products DRAM and NAND flash, is deteriorating, leading to weak earnings in the second half of the year. Choi Doyeon, a researcher at Shinhan Financial Investment, analyzed, "Price negotiations between server companies and manufacturers have been tough, resulting in disrupted shipment volumes. Due to macro demand slowdown, downstream companies are passing inventory burdens onto manufacturers, so the price decline in the third quarter is expected to be larger than anticipated."

However, the general consensus is that since most of the negative factors have already been priced in, the likelihood of further stock price declines is low. Kim Kyungmin, a researcher at Hana Financial Investment, said, "With the expansion of Huawei sanctions and DRAM spot prices falling to historically low levels, if reflecting negative factors is a condition for stock price rebound, buying SK Hynix should not be burdensome."

There are also voices suggesting that if the stock price falls further, it could be an opportunity for bargain buying. Kim Jangyeol, head of the Sangsangin Securities Center, explained, "Although semiconductor prices are expected to decline in the second half of this year, if the stock price falls further, one can look for opportunities rather than fear. Unless a large-scale deficit situation like in 2008 unfolds, even if semiconductor prices continue to fall until the end of this year or the first quarter of next year, the possibility of losses is low."

This content was produced with the assistance of AI translation services.