[E-Daily Reporter Park Sun-Yeop ] Amid continued extreme volatility in the domestic stock market, analysts have concluded that the key to a market rebound lies in restoring confidence in the semiconductor industry. While investor sentiment remains shaken—to the point where circuit breakers and “side cars” are being triggered repeatedly—the assessment is that, given the solid earnings outlook and the sharp decline in valuations, the likelihood of a rebound from this excessive correction has increased.
Lee Young-won, an analyst at HEUNGKUK METALTECH CO.,LTD., stated in a report on the 9th, “The heightened volatility and falling stock prices are rooted in doubts about the semiconductor industry’s outlook,” adding, “Restoring market confidence in sustainable growth is the key to improving the current undervalued conditions.”

The KOSPI market has shown signs of instability recently, with circuit breakers and sell-side cars being triggered in quick succession over the past two days. According to the report, of the 12 circuit breaker triggers in the KOSPI market since the system was established, half—six—have occurred this year. Of these, three were triggered in June alone, and one in July. The sell-side car has also been triggered 33 times in the KOSPI market so far this year, surpassing the 26 times recorded in 2008.
The magnitude of the index corrections has also been significant. The KOSPI fell 20.5%, dropping from its high of 9,114.55—based on the closing price on the 22nd of last month—to 7,246.79. The KOSDAQ plunged 36.0%, falling from its April 27 high of 1,226.18 to 785.00. This is 15.2% lower than the year-end level of 925.47.
External factors are also contributing to the increased volatility. Concerns that inflationary pressures could rise again—as tensions between the U.S. and Iran escalate once more and oil prices rebound—are weighing on the market. However, HEUNGKUK METALTECH CO.,LTD. pointed to doubts about the semiconductor industry’s outlook as a more fundamental cause. The firm explained that the overall index has become more volatile as SamsungElectronics and SK hynix—which had previously driven the market higher—have experienced corrections more severe than those of the KOSPI.
In fact, the combined market capitalization of SamsungElectronics(005930)and SK hynix(000660)has fallen by 25.7% from its peak. In contrast, the KOSPI’s market capitalization, excluding these two stocks, has declined by only 14.6% since the index’s peak. Concerns that surging semiconductor prices could lead to a slowdown in final consumer goods sales, controversy over Meta’s use of surplus computing resources in its data centers, and SamsungElectronics’ relatively low operating profit margin were cited as factors that shook investor sentiment.
However, HEUNGKUK METALTECH CO.,LTD. viewed the recent stock price decline as somewhat excessive. This is because, despite upward revisions to the consensus earnings forecasts for SamsungElectronics and SK hynix, their stock prices have plummeted, resulting in excessively low valuations. As of the previous trading day, SamsungElectronics’ 12-month forward price-to-earnings ratio (P/E ratio) stood at 4.16x, while SK hynix’s was 5.17x. The combined P/E ratio for the two stocks stood at just 4.59x, while the overall KOSPI 200 P/E ratio hit a new year-to-date low of 5.98x.
The analyst noted, “With SK hynix’s ADR listing just one day away, reports indicate that the excessive decline in its stock price has led to high subscription competition,” adding, “It appears likely that the price correction led by the semiconductor sector will ease.” He continued, “In the AI-driven growth process, the sustainability of the semiconductor industry’s performance will be the key factor determining the market’s direction.”
Regarding the KOSDAQ market, the analyst noted that it has undergone a more significant correction than the KOSPI, leading to a deepening divergence between the two. The market capitalization ratio between the KOSPI and KOSDAQ has widened to 13.3 times. The gap, which had narrowed to 4.4 times in 2023, has widened significantly again amid a concentration of investment in the KOSPI. HEUNGKUK METALTECH CO.,LTD. predicted, “While the market trend is unlikely to change easily, a selective normalization process based on fundamentals will also take place.”