[MarketING] Semiconductors Soar on Positive News... KOSPI Recovers to 2510 Level

KOSPI Rises for Fourth Consecutive Day, Recovers to 2510 Level
Samsung Electronics and SK Hynix Both Up 1.85%

The KOSPI continued its upward trend for the fourth consecutive day, recovering to the 2510 level. The semiconductor sector, buoyed by positive news, led the index's rise. Samsung Electronics and SK Hynix, which had been stagnant for a while, have recently maintained their upward momentum, reaching near-year-high levels. With growing expectations for a recovery in the industry in the second half of the year, attention is focused on whether this upward trend can continue.

KOSPI Rises for 3 Consecutive Days, Recovers to 2510 Level... Samsung Electronics Hits Highest Level This Year

On the 18th, the KOSPI closed at 2515.40, up 20.74 points (0.83%) from the previous day. The KOSDAQ ended the session at 835.89, up 1.7 points (0.20%).

[Image source=Yonhap News]

While institutions sold, foreign investors led the KOSPI's rise, and individuals drove the KOSDAQ's increase. On that day, foreign investors net purchased 528.6 billion KRW in the KOSPI market. Individuals and institutions net sold 444.8 billion KRW and 81.6 billion KRW, respectively. In the KOSDAQ market, individuals bought 171.5 billion KRW, defending against index declines. Foreign investors and institutions sold 131.3 billion KRW and 37.1 billion KRW, respectively.

Kim Seok-hwan, a researcher at Mirae Asset Securities, analyzed, "The expectation of a U.S. debt ceiling negotiation and concentrated foreign buying in the semiconductor sector led the KOSPI index's rise," adding, "The KOSDAQ's gains were limited due to profit-taking in the recently rising bio and entertainment sectors." He also noted, "The won-dollar exchange rate fell, easing the pressure of won depreciation." On that day, the won-dollar exchange rate in the Seoul foreign exchange market closed at 1,334.2 won, down 3.0 won from the previous day.

The semiconductor sector's strength translated into index gains. Samsung Electronics and SK Hynix closed up 1.85% each. Samsung Electronics closed at 66,200 KRW, marking its highest closing price this year. SK Hynix also rose for three consecutive days, pushing its stock price to near-year-high levels.

Positive news translated into foreign buying. Foreign investors net purchased 362.6 billion KRW of Samsung Electronics, the largest amount, followed by SK Hynix at 105.9 billion KRW.

First, the previous day’s U.S. stock market saw semiconductor stocks rise strongly after news that Nvidia and ServiceNow had formed an artificial intelligence (AI) partnership. Nvidia rose 3.30%, ServiceNow 5.27%, AMD 2.24%, and Micron 1.87%, pushing the Philadelphia Semiconductor Index up 2.49%. Han Ji-young, a researcher at Kiwoom Securities, said, "The AI contract between Nvidia and ServiceNow, expectations for AMD’s improved performance due to PC demand normalization, and the accompanying strength in AI-related and semiconductor stocks created a more favorable supply-demand environment for domestic AI and semiconductor stocks, which have recently seen shifting demand."

Additionally, news that the Japanese government requested expanded investment from seven foreign semiconductor manufacturers and research institutions, including Samsung Electronics, also acted as a positive factor.

Growing Expectations for Industry Recovery in the Second Half Remain Valid

With growing expectations for an industry recovery in the second half, attention is focused on whether Samsung Electronics and SK Hynix can sustain their stock price strength.

Samsung Electronics’ stock price rose on the back of production cut plans announced during its first-quarter earnings report last month but had since been sluggish. Recently, with several positive factors emerging, the stock price appears to be regaining upward momentum.

Supply-demand conditions are expected to improve from the second half, keeping hopes for an industry recovery valid. Kim Dong-won, a researcher at KB Securities, said, "From the second half, the semiconductor sector is expected to see clear supply-demand improvements due to inventory reduction, slowing price declines, and supply cuts from production reductions." He added, "Even assuming a somewhat delayed recovery in semiconductor demand, the supply reduction effect from Samsung Electronics’ production cuts exceeding 20% alone is expected to bring global DRAM and NAND supply-demand close to balance in the second half. The impact of semiconductor price declines will significantly reduce semiconductor cost burdens for global set manufacturers, enabling expectations for shipment growth driven by increased hiring."

Kim Kwang-jin, a researcher at Hanwha Investment & Securities, forecasted, "If the industry’s wafer input reduction continues at around -25% through the third quarter of this year, DRAM production will decrease by 7% compared to the previous year. Supply shortages are expected to begin from the third quarter, leading to the depletion of accumulated inventory."

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