[Edaily Reporter kyoungeun kim ] The KOSPI has been struggling for the fifth consecutive week. This is due to concerns weighing on the market that the artificial intelligence (AI) investment boom—which had driven the market rally—may have peaked and is now on the decline. Market volatility was so extreme that the “side car” mechanism was triggered for 10 consecutive trading days. However, the securities industry is telling a slightly different story. They point out that focusing solely on the slowdown in business conditions means only seeing half the picture when it comes to AI valuations.
According to MP Doctor on the 27th, SamsungElectronics(005930)closed at 254,000 won, up 4,500 won (1.80%) from the previous day, while SK hynix(000660)closed at 1,816,000 won, up 57,000 won (3.24%).
The month of July was particularly noisy. Issues surrounding Meta’s computing capacity leasing business came to light, and shortly thereafter, China’s Moonshot AI unveiled its new frontier model, “Kimi K3,” stoking market anxiety. Ironically, however, the pace of model releases during this period actually accelerated more than ever before. The general consensus both inside and outside the industry is that while the market noise was just that—noise—the underlying demand for AI remained robust.

Of course, questions remain about how long AI-driven profits will last. However, a game-changer emerged over the weekend. On the 24th (local time), at the “San Francisco AI Summit,” Korean companies and global Big Tech firms joined forces to announce AI and semiconductor collaborations totaling $950 billion (approximately 1,400 trillion won). Cooperation involving SK Group alone amounts to $750 billion, with the next-generation memory and data center partnership with NVIDIA accounting for $500 billion of that total. The partnership between SamsungElectronics(005930)and Broadcom is also expected to reach up to $200 billion.

Reuters assessed that, as U.S. Big Tech companies are expanding their cooperation with South Korean semiconductor firms to secure stable supply chains, this agreement has further increased the mutual dependence of both sides’ supply chains. There is also an interpretation that the competitive focus in the AI industry is shifting from individual semiconductor supply to competition within the ecosystem, such as AI data centers and computing infrastructure.

Cho Jun-ki, an analyst at SKSecurities, noted, “While there will be a process to verify the announced figures, the binding nature of individual contracts, and the timing of recognition, this announcement effectively refutes concerns such as a peak in AI capital expenditures or a decline in demand due to efficiency improvements,” adding, “It will serve to put the brakes on recent negative narratives.”

However, it is too early to be optimistic that the index will immediately stabilize following this announcement. Although foreign investors have been net buyers on the KOSPI for two consecutive weeks, easing the strong selling pressure, the volatility index (VKOSPI) remains at a high level, still approaching 80 points. Outstanding margin loan balances on the KOSPI have fallen from around 30 trillion won—their peak—to 25.74 trillion won, while those on the KOSDAQ have dropped from 11 trillion won to 7 trillion won. Customer deposits have also declined from 140 trillion won to 105.63 trillion won.

Nevertheless, the picture changes when viewed from a slightly longer-term perspective. The view is that even if the current abnormally high memory prices enter a stabilization phase, what truly matters is the trend of expanding the market’s overall size through increased supply. Kim Doo-eon, an analyst at Hana Securities, advised, “Supply shortages drive earnings, but symbiosis drives valuation,” adding, “You should still buy leading stocks, but focus on companies that can turn scarcity into repeatable profits.” He explained, “SK Group Chairman Choi Tae-won views current memory prices as abnormally high and has emphasized that we must increase supply to grow the market together, even if margins decline somewhat—this is in the same vein,” adding, “It’s a strategy to prevent ‘chipflation’ from eroding demand for PCs and smartphones or allowing new competitors to enter the market.”

The aspect that Analyst Kim is particularly focusing on is the shift in long-term contract structures. He said, “While existing long-term supply agreements (LTAs) focused on extending the contract period, the 16 Strategic Customer Agreements (SCAs) signed by Micron lock in the very floor of volume and cash flow,” adding, “A revaluation of memory ultimately begins when the floor of profits rises higher than the ceiling of prices.”

Meanwhile, a series of major events set to determine the market’s direction are scheduled for the end of this month. In South Korea, SK hynix(000660) on the 29th and SamsungElectronics(005930)on the 30th will release their final earnings reports and hold conference calls. In the U.S., Microsoft and Meta are scheduled to report earnings in the early hours of the 30th (KST), followed by Amazon and Apple in the early hours of the 31st.