[Edaily Reporter Park Sun-Yeop ] Analysts have noted that volatility in the domestic stock market is increasing as the steep profit growth trends at SamsungElectronics(005930)and SK hynix(000660)are slowing down. However, rather than viewing this as the end of the semiconductor growth cycle, it is assessed that the growth model reliant on price increases has reached its limits. The focus of future growth is expected to shift from semiconductor prices to the expansion of production capacity.
Lee Young-won, an analyst at HEUNGKUK METALTECH CO.,LTD., stated in a report on the 14th, “The key cause of the recent increase in market volatility is concern over a slowdown in semiconductor growth momentum,” but added, “Current stock prices reflect not only a growth slowdown within the expected range but also excessive pessimism.”

Recently, the KOSPI fell 8.94%, dropping below the 7,000 mark. This marks the largest single-day drop since the index plummeted 9.99% on the 23rd of last month. In particular, SK hynix and SamsungElectronics led the decline, falling 16.15% and 9.65%, respectively. Despite the successful listing of its American Depositary Receipts (ADRs), SK hynix reacted more sensitively to concerns about slowing earnings growth than to expectations of improved supply and demand.
In fact, the pace at which securities firms are raising their earnings forecasts has slowed noticeably. The month-over-month growth rate of 12-month forward net income forecasts this month stood at just 9.3% for SamsungElectronics and 6.7% for SK hynix. This represents a significant decline compared to January, when the growth rates for the two companies were 71.7% and 76.9%, respectively, and April, when they reached 58.7% and 60.5%.
Analysts also assess that improvements in operating profit margins are nearing their peak. SK hynix’s operating profit margin rose from 23% in the first quarter of 2024 to 71.5% in the first quarter of this year, but is expected to reach the 76% range in the second quarter. Analysts predict that it is likely to plateau in the high 70% range rather than surpass the 80% mark thereafter.
However, HEUNGKUK METALTECH CO.,LTD. analyzed that this slowdown in growth stems from production capacity constraints rather than a decline in semiconductor demand. With the ramp-up of new production facilities limited, it is difficult to continue driving up revenue and profit margins through price hikes alone. As price resistance from semiconductor buyers is also increasing, future growth is likely to be driven more by expanding production volume than by raising selling prices.
In the medium to long term, the firm projected that the launch of new factories and the expansion of existing production facilities would serve as new growth drivers. The recent decision by SamsungElectronics and SK hynix to accelerate their investment schedules for large-scale semiconductor production facilities is interpreted as a move to respond to the long-term demand that artificial intelligence (AI) is expected to generate.
Of course, aggressive expansion of production capacity requires the assumption that AI demand will persist over the long term. However, some point out that it is excessive to fully factor the possibility of oversupply into stock prices before actual investment begins in earnest.
The analyst stated, “The fact that the 12-month forward price-to-earnings ratio (PER) for SamsungElectronics and SK hynix has fallen to around 4 times reflects excessive pessimism toward the semiconductor industry,” adding, “While we must remain vigilant about the possibility of further turmoil, it is now time to also consider the conditions under which market volatility might subside.”