Kim Byung-yeon, an analyst at NH INVESTMENT & SECURITIES, stated in a report on the 14th, “A sharp price correction occurred due to a combination of various negative factors, including speculation about a peak in the semiconductor market, the reignition of U.S.-Iran tensions, domestic supply-demand disruptions, and concerns over rising U.S. interest rates,” adding, “The stock market will rebound once uncertainty subsides.”
Recently, the KOSPI 200 Volatility Index (VKOSPI) rose to 96.9, surpassing the peak of 89.3 reached during the global financial crisis. This is more than four times its long-term average of 21.6. Analysts explain that since market fear has reached extreme levels, there is little room left for prices to reflect additional negative factors.
Researcher Kim stated, “We need to recall how the market rebounded rapidly following the sharp decline in March and April,” adding, “Even if another sudden drop occurs, the market is in a range where it could rebound again within two to three days.” He predicted that the market would then continue to reassess the industry’s direction while monitoring the earnings of U.S. Big Tech companies and whether AI investments will continue.
He also judged that concerns about a “peak-out” in the semiconductor sector—which have emerged as a key factor behind the market correction—are premature. While short-term earnings forecasts for companies like SK hynix(000660)may be slightly lowered due to the application of Long-Term Agreement (LTA) prices, this is because the likelihood of Big Tech companies scaling back AI investments is low, and the industry’s growth trajectory remains clear.
NH INVESTMENT & SECURITIES projected that capital expenditures (CAPEX) for the five hyperscalers—Microsoft, Meta, Alphabet, Amazon, and Oracle—would reach $758 billion this year, a 51.1% increase from the previous year. The firm assessed that these companies have sufficient financial capacity to sustain such large-scale investments, as their earnings before interest, taxes, depreciation, and amortization (EBITDA) are also expected to rise by 29.4% during the same period.
The report also noted that improvements in the token usage efficiency of AI models should not be equated with a decline in semiconductor demand. The analysis suggests that as some computational tasks are distributed to central processing units (CPUs) and external devices, the importance of not only high-bandwidth memory but also general-purpose memory, data centers, and network infrastructure could grow in tandem.
The listing of SK hynix’s American Depositary Shares (ADS) was also cited as a factor contributing to a revaluation of the stock price. As of the 10th, SK hynix ADS were trading at a price approximately 16% higher than the domestic shares. Given that the structure makes active arbitrage trading difficult in the short term, a certain level of premium is likely to be maintained; furthermore, the report noted that additional capital inflows could be expected if the stock is included in major semiconductor indices in the future.
Supply-demand pressures are also expected to gradually ease. With investor deposits still hovering around the 100 trillion won mark and margin trading balances remaining low relative to market capitalization, the risk of large-scale forced selling, as seen in the past, is considered limited. The analysis also noted that foreign investors’ stake in domestic semiconductor stocks has fallen to a historic low, making it highly likely that additional selling pressure will gradually diminish.
Researcher Kim stated, “Since both the U.S. and Iran would find it difficult to sustain a long-term blockade of the Strait of Hormuz, it is highly likely that limited clashes will occur alongside long-term negotiations.” He added, “As expected inflation and wage growth pressures in the U.S. have stabilized, and the Federal Reserve is expected to keep the benchmark interest rate on hold for the time being, the intensity of variables that could further destabilize the market will gradually weaken.”
