[Edaily Reporter kyoungeun kim ] Concerns are growing that the KOSPI may fall further as the global semiconductor sector plummeted across the board during the holiday period. However, analysts in the securities industry have pointed out that this sharp decline stems not from earnings deterioration but from a vicious cycle driven by market sentiment and supply-demand dynamics. They suggest that, given valuations are nearing historic lows, investors should view this as an opportunity to increase their exposure to the market.

On the 20th, Lee Kyung-min, an analyst at DaishinSecurities, stated, “I believe that this sharp decline in the U.S. and global semiconductor markets, much like the plunge in the Korean semiconductor sector, is not driven by fundamental factors,” adding, “I judge that there is no real benefit to selling at levels below six times the KOSPI. Rather, investors should take advantage of the volatility to actively accumulate shares or maintain a holding strategy.”
Last week, as of the 16th, the KOSPI closed at 6,820.6 points, down 8.77% from the previous week. SamsungElectronics(005930), SK hynix(000660) The index fell below the 7,000 mark amid the sharp decline, and concerns about a drop below the 6,000 mark intensified due to further sharp declines by global semiconductor companies over the holiday. The Philadelphia Semiconductor Index fell 5.85% (9.71% based on intraday lows) over the two days of the 16th and 17th.
This analyst cited three factors behind the sharp decline. Despite TSMC posting record-breaking earnings, the expansion of capital expenditures (Capex) was interpreted as an increase in supply, triggering “sell-on” selling pressure. Additionally, the unveiling of Chinese AI firm MoonShot AI’s new model, “Kimi K3,” spread fears of a “second DeepSeek moment,” accelerating the sell-off in semiconductor stocks. In addition, as international oil prices surged 11–14% on a weekly basis amid escalating U.S.-Iran tensions, concerns grew over a resurgence of inflation and the risk of monetary tightening (interest rate hikes) by the Federal Reserve (Fed).
The analyst assessed that “this sharp decline was not due to ‘poor earnings’ but rather doubts about the ‘sustainability of strong earnings,’” adding that “it served as the direct trigger for the ‘margin peak-out’ debate.” He further explained, “The news that Meta is leasing data center capacity from Google has cracked the narrative of scarcity—the idea that ‘AI computing resources are infinitely scarce.’” He also noted that while leveraged exchange-traded funds (ETFs) had bolstered upward momentum during the bull market, their supply and demand dynamics acted as a headwind that amplified volatility during the downturn.
The analyst continued, “Earnings forecasts through next year are actually being revised upward, so concerns about a reversal in the decline of semiconductor prices or the industry having passed its peak are premature,” adding, “The recent slight downward revision to KOSPI and semiconductor earnings forecasts is entirely due to ‘ SK hynix(000660) ’ and reflects a correction of elevated expectations.”
In fact, the 12-month forward earnings per share (EPS) actually rose from 1,015 points at the end of May to 1,174 points on July 16. Consequently, the KOSPI’s current 12-month forward price-to-earnings ratio (PER) stands at just 5.81x—falling below 6x for the first time since the 2004 credit card crisis and approaching its historic low of 5.14x since 2000, according to analysts. The analyst stated, “During this process, leading sectors such as IT hardware, semiconductors, machinery, shipbuilding, and rechargeable batteries—which had been in overheated territory—have shifted into the undervalued range relative to earnings, and price attractiveness has increased to the point where 24 sectors are now undervalued relative to earnings on a monthly basis.”
The analyst also pointed out that at the peak on the 22nd of last month, the semiconductor sector’s share of total market capitalization reached 62.2%. “If we include IT hardware and SKSQUARE(402340), the figure exceeds 68%,” he explained, adding, “As an aftereffect of the unprecedented surge and concentration in these sectors, the KOSPI has plummeted 25.2% from its peak—a decline more than twice as steep as that of Taiwan (-11.4%) and Japan (-10.6%), which ranked second and third, respectively, in terms of year-to-date gains.” However, he noted, “Since the KOSPI entered a correction phase ahead of global markets, it is highly likely to lead the market in bottoming out as well.”
He added, “Fluctuations around the 6,000 level early in the week present an opportunity to increase exposure. This is a range where upside potential outweighs downside risk,” advising, “If the index falls further into the low 6,000s, investors should refrain from panic selling and instead hold or increase their positions.” He identified existing leading sectors—such as semiconductors, IT hardware, IT home appliances, rechargeable batteries, shipbuilding, chemicals, and machinery—as promising areas for accumulation.
From a technical perspective, the key will be whether the market can secure support at the 6,600 level. The analyst stated, “The second support level is between 6,900 and 7,200, and if the market breaks below that, the low 6,000 range (with a forward P/E ratio of 5.14) will serve as the final support level.” In the event of a rebound, the first inflection point is the 8,000 level and the second is the 8,500 level; based on technical analysis, the first target was set at 9,106 points.