[Edaily Reporter Park Sun-Yeop ] As the domestic stock market continues to experience extreme volatility—in contrast to global markets—analysts predict that the key to a short-term rebound will lie not in the earnings of semiconductor companies, but in the monetization strategies of global Big Tech firms investing in artificial intelligence (AI). The analysis suggests that since the strong semiconductor market conditions and improved earnings have already been largely factored into stock prices, further gains will require confidence from demand-side companies that continue to make large-scale capital investments.
Cho Jun-ki, an analyst at SKSecurities, stated in a report on the 13th, “The fact that SamsungElectronics’ stock price plummeted despite the company announcing record-breaking preliminary second-quarter earnings reaffirms that semiconductor earnings are not currently the key factor determining short-term stock prices,” adding, “The stance of hyperscalers, who will provide funding to semiconductor stocks, has become more important.”

Last week, the KOSPI closed at 7,475.94, down 7.57%, entering a technical bear market with a decline of more than 20% from its peak. During the same period, the KOSDAQ also fell 3.57%. In contrast, the U.S. S&P 500 Index rose 1.23%, the Nasdaq Index rose 1.74%, and the Dow Jones Industrial Average hit a record high.
The explanation is that while the correction in global semiconductor stocks did not significantly impact major U.S. indices, the impact was concentrated on the domestic stock market, where SamsungElectronics and SK hynix account for a large portion of the market. Analyst Cho stated, “Although the correction in the global semiconductor sector was at a level that was difficult to perceive in U.S. indices, it was reflected excessively strongly in Korean indices,” adding, “The structural imbalance in the domestic stock market has been reaffirmed.”
In fact, looking at last week’s sector-by-sector returns in the domestic market, information technology (IT) hardware plunged 18.7%, posting the largest decline. Shipbuilding, trading companies and capital goods, and machinery also fell by around 10% each, while semiconductors dropped 9.1%. In contrast, media and education rose 4.5%, banking 3.5%, and telecommunications services 2.5%, demonstrating resilience.
This week, the start of full-scale trading of SK hynix(000660) American Depositary Receipts (ADRs) was cited as a key factor that could influence investor sentiment toward domestic semiconductor stocks. SK hynix’s ADR saw oversubscription of more than seven times during the subscription phase and rose 13% on its first day of trading. Once regular trading begins, the key point of interest will be the price differential that forms between the ADR and the domestic listed stock.
However, analysts note that strong earnings from semiconductor companies alone are unlikely to drive stock prices higher. While both SamsungElectronics and, earlier, Micron reported solid earnings, the market reaction was limited. This is because the market is reacting more sensitively to the sustainability of investments and the pace of monetization by Big Tech companies executing AI infrastructure investments than to the earnings of semiconductor suppliers.
Analyst Cho predicted, “Like Meta recently, these companies need to shift toward a new growth narrative or demonstrate tangible progress in monetizing their AI investments,” adding, “Rather than all Big Tech stocks rising in unison, share prices are likely to diverge based on their monetization strategies and the speed of execution.”
For the U.S. second-quarter earnings season beginning this week, he predicted that the earnings reports from ASML and TSMC would be more important to the domestic stock market than those of financial stocks. ASML is scheduled to announce its earnings on the 15th, and TSMC on the 16th. Analysts suggest that domestic semiconductor investment sentiment can only stabilize if both companies continue to deliver “earnings surprises and upward revisions to outlooks”—exceeding market expectations and raising their future forecasts.
Volatility in the domestic stock market remains high. The KOSPI 200 Volatility Index (VKOSPI) stood at 78.15 on the 10th, down from the intraday high of 97.99 recorded on the 29th of last month, but it remains at a level where a daily fluctuation of about 5% is statistically possible.
Looking at the Average True Range (ATR), which reflects the difference between intraday highs and lows, the KOSPI stood at 7.55% and the KOSDAQ at 6.13%. These figures are significantly higher than the Nasdaq’s 1.75% and the S&P 500’s 1.11%. This means that the price fluctuations actually experienced by investors during trading hours are greater than the decline in the volatility index suggests.
Researcher Cho stated, “For the domestic stock market to regain stability, the VKOSPI must fall further from its current level,” adding, “This week, we need to monitor the price formation of SK hynix ADRs, the earnings reports from ASML and TSMC, and the upcoming Big Tech earnings season, which will gain momentum in the coming weeks.”