"Memory Semiconductor Winter Turns to Spring"... Foreign Investors Focus on Samjeon and SK Hainikseu

Micron's Strong Earnings and Positive Industry Outlook Presented
Foreign Investors Also Focus on Buying Samsung Electronics and SK Hynix in Korean Stock Market

[Asia Economy New York=Correspondents Baek Jong-min and Lee Min-woo] "The memory semiconductor winter is turning into spring."

On the 21st (local time), the U.S. investment media MarketWatch evaluated the strong performance and sharp rise in stock price of semiconductor company Micron Technology in this way. In the domestic stock market, foreign investors' sentiment is pouring into Samsung Electronics and SK Hynix.

Micron's stock price, which mainly produces NAND flash and DRAM, surged 10.54% on the Nasdaq market that day, closing at $90.68. According to FactSet, this increase was the largest since April 6 last year, when it rose 12.5%.

Matt Bryson, an analyst at Wedbush Securities, said, "The memory market's winter is turning into spring," raising Micron's target price from $85 to $100. He expressed surprise, saying, "Micron is indicating that the bottom is approaching, contrary to the expected harsh memory market downturn."

Earlier, Morgan Stanley Securities predicted a slump in the memory semiconductor market in a report titled "Memory, Winter is Coming," and the stock prices of memory semiconductor companies such as Samsung Electronics and SK Hynix plunged simultaneously.

Micron's strong performance has brought warmth to the semiconductor sector as a whole. Non-memory semiconductor companies' stock prices also rebounded, with AMD up 6.2% and Nvidia up 4.8%, recovering from the recent adjustment caused by the spread of the Omicron variant. Semiconductor equipment companies such as Lam Research, Applied Materials, and ASML also saw their stock prices rise by nearly 4%.

In the domestic stock market, foreign investors have been concentrating their purchases on semiconductor "blue chips" such as Samsung Electronics and SK Hynix since the beginning of this month. This is interpreted as bottom-fishing driven by the judgment that the previously feared slowdown in growth has hit the "bottom" and will rebound from next year.

On the previous day, foreign investors net bought 134.4 billion KRW and 98.4 billion KRW worth of Samsung Electronics and SK Hynix stocks, respectively. This corresponds to the first and second largest net purchases by foreigners on that day. Considering that the total net foreign purchase in the KOSPI market was only 29.3 billion KRW the day before, it means that while disposing of other stocks, they concentrated their purchases on Samsung Electronics and SK Hynix.

In the case of Samsung Electronics, foreign net purchases continued almost daily except for only two days, the 3rd and 10th of this month. From the 1st to the previous day, a total of 2.0922 trillion KRW worth was purchased. This is twice the size of the largest monthly net purchase of 1.0176 trillion KRW in September this year. SK Hynix also saw net purchases on all but five trading days this month.

The "bottom theory" for semiconductors is circulating, and investment sentiment is gathering again. In particular, Micron's earnings announcement and the positive shift in future market outlook served as a catalyst. Lee Seung-woo, a researcher at Eugene Investment & Securities, analyzed, "Considering Micron's sales target for the next quarter, although the decline in chip prices will lead to further sales decreases, the sales drop is expected to be in the low single digits. Compared to the 43% sales drop from the peak during the 2018-2019 memory downcycle, this decline is minimal, and the amplitude of this memory cycle's decline is not large, with a high probability that the impact will not be prolonged."

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