[Edaily Shin Ha-yeon Reporters Kim Kyung-eun, Park Min, Kim Hyung-il, Yoon Kim] Despite record-breaking earnings, stock prices have plummeted, fueling growing market skepticism about the sustainability of the semiconductor boom. Amid continued selling by foreign investors and heightened concerns over China’s technological catch-up, the market appears to be reacting more sensitively to future competition and supply-demand uncertainties than to current profits. Experts note that the semiconductor industry’s growth momentum remains intact but emphasize the possibility of a correction driven by supply-demand imbalances.

According to MP Doctor on the 13th, the KOSPI closed at 6,035.35, down 348.89 points (5.46%) from the previous trading day. The index extended its losses from the start of the session, triggering a sell-side circuit breaker for the first time in about two months since August 19. During the session, it fell as low as 5,911.11, with the decline reaching 7.41% at one point, before partially recovering. As foreign investors net sold more than 4.5 trillion won on the KOSPI market in a single day, SamsungElectronics and SK hynix fell 7.39% and 10.09%, respectively, dragging down the index.

◇Foreign Investors Pull Out Despite Strong Earnings… Double Whammy of Concerns Over China’s Catch-Up and Supply-Demand Imbalance

The KOSPI has fallen 8.91% in just two days this week. The decline was exacerbated by massive net selling by foreign investors. Foreign investors have been net sellers of the KOSPI for six consecutive trading days, selling off 3 trillion won worth of SamsungElectronics and 7.2 trillion won worth of SK hynix during this period alone.

In particular, the foreign ownership ratio of SamsungElectronics stood at 46.35% as of the close of regular trading the previous day, falling to the level last seen on January 11, 2008. This figure is approximately 6 percentage points lower than the 52.40% recorded on January 6 of this year. This represents a mixed trend: while earnings hit a record high, the foreign ownership ratio has fallen to levels last seen during the year of the global financial crisis.

Amid this situation, concerns about competition stemming from Chinese company Changxin Memory Technology (CXMT)’s plans to launch next-generation DRAM weighed on investor sentiment. CXMT announced that it would release server memory products featuring a “4F²” structure by the end of the year. As a result, on the U.S. stock market last night, Micron and SanDisk fell by approximately 3.9% and 6%, respectively, while the Philadelphia Semiconductor Index dropped by about 2.7%.

Share buybacks, which had been absorbing selling pressure, are also entering their final stages. SamsungElectronics completed its buyback program on the 6th, and SK hynix’s buyback—already about 90% complete—is expected to wrap up within this week.

Commenting on the day’s sharp market decline, Lee Sang-jun, an analyst at NH INVESTMENT & SECURITIES, noted, “There were CXMT-related issues, and from a supply-and-demand perspective, the share buybacks by SamsungElectronics and SK hynix had previously supported the market, but as they have effectively come to an end, there was a slight gap in supply and demand.” He added, “Amid heightened macroeconomic uncertainty surrounding interest rates and oil prices, the market’s overall sensitivity has increased.”

◇“Growth Momentum Unharmed”… Verifying Earnings Is Key Amid Over-Sold Conditions

However, experts assessed that the recent sharp decline has already largely factored in negative factors. Lee Jong-hyung, Head of the Research Center at KIWOOM Securities, noted that while the market should remain open to a decline to the previous low of 5,500, “Considering the emergence of technical oversold signals and the fact that the forward price-to-earnings ratio (PER) has fallen to around 4 times, the current sharp decline is strongly characterized by oversold conditions.” He added, “The practical benefit of a strategy that bets on further declines is not expected to be significant.”

Yang Ji-hwan, Head of the Research Center at DaishinSecurities, also diagnosed that “the fundamental causes of the downturn are doubts about the economic cycle and uncertainty regarding stock supply and demand.” He explained that with 2027 earnings forecasts being revised upward, the forward P/E ratio remains below 5x, indicating that stock prices are extremely undervalued relative to earnings. While identifying the 5,800 level as the first support line and the 5,500–5,600 range as the second, he emphasized, “I do not expect prices to remain below the 6,000 level for long.”

Semiconductor demand and corporate earnings were cited as the basis for a rebound. Noh Geun-chang, CEO of Semicon Research Lab, said, “The stock price is moving based on supply and demand factors rather than fundamentals,” adding, “Since U.S. companies account for over 80% of data center investments, there is no possibility that they will adopt Chinese-made server DRAM.” He noted that semiconductor stocks had also rebounded last July after falling, following confirmation of expanded investment plans by major cloud companies like Amazon, and predicted, “If both suppliers and buyers report positive results after the earnings announcements at the end of this month, the selling pressure from foreign investors will likely lead to short covering.”

Some analysts also noted that it is difficult to conclusively determine whether the market has entered a bear market until it is confirmed whether China’s catch-up efforts translate into actual competitiveness. Kim Hak-kyun, head of the Research Center at ShinyoungSecurities, explained, “While it is close to the truth that Chinese companies pose a major long-term threat, we need to verify their yield rates and the economic viability of mass production.” He added, “As long as the market does not break below the previous low, it will remain in a trading range,” and noted, “Rather than predicting a bear market in advance, we can only recognize it in hindsight once it has passed.”

However, some point out that investors should remain wary of expanding supply even after stock prices recover. Seo Sang-young, Executive Director at MIRAE ASSET SECURITIES, noted, “Given that shortages of AI semiconductors and memory chips persist, it is difficult to say that the industry’s overall growth momentum has been undermined,” but he pointed out, “An increase in semiconductor supply is expected to become a significant burden in the second half of 2027.” He further noted, “Since the stock market tends to reflect rising supply and slowing price growth before actual earnings are reported, profit-taking pressure could intensify starting in the first half of 2027.”