[Edaily Reporter Kim Kyung-eun ] SamsungElectronics(005930)and SK hynix(000660): With stock prices having plummeted by about 50% from their peaks, an analysis suggests that, based on past trends, there is a 90% probability of a rebound within the next three months. The recent stock price decline is largely attributed to large-scale position liquidations by global hedge funds and a surge in short selling, rather than a deterioration in the semiconductor industry’s business conditions. The outlook suggests that once selling pressure eases, “short covering”—the repurchase of shares by short sellers—could provide the catalyst for a stock price rebound.

On the 12th, KB Securities analyzed the stock price trends of SamsungElectronics and SK hynix over approximately 20 years since 2005 and found that, on average, there was a roughly 90% probability that stock prices would rise within three months after falling by 40–50% or more from their peak. By company, SamsungElectronics recorded a 97% probability, while SK hynix recorded 81%.

KB Securities analyzed that the recent sharp decline in the stock prices of both companies was the result of global investors reducing their exposure to risky assets, rather than a deterioration in earnings outlook. In particular, the firm noted that supply-and-demand pressures had reached historically high levels due to a surge in short selling of global tech stocks.

As of the fourth quarter of this year, the outstanding short positions in global tech stocks increased by 46% compared to the beginning of the year. This figure significantly outpaces the 32% growth rate in long positions in tech stocks during the same period. The increase in short positions in tech stocks accounted for one-third of the total increase in global stock short positions.

Kim Dong-won, Head of Research at KB Securities, explained, “Following the U.S. midterm elections, concerns over uncertainty regarding artificial intelligence (AI) regulations and intensifying competition for AI capital funding have overlapped, leading to a concentration of short-term bearish bets on tech stocks.”

Large-scale position liquidations by hedge funds also fueled the stock price decline. KB Securities estimated that the scale of hedge fund position liquidations this month has approached its highest level in nearly 10 years, since 2016. Analysts note that the widening gap between semiconductor companies’ earnings outlooks and their stock prices resulted from simultaneous deleveraging—reducing the scale of leveraged investments—and adjustments to global risk asset allocations.

On the other hand, the semiconductor industry itself is still considered robust. Driven by expanded investment in AI data centers and rising demand for memory chips, the earnings outlooks for SamsungElectronics and SK hynix for 2027–2028 are being revised upward.

The fact that both companies plan to announce additional shareholder return policies next January is also cited as a positive factor. The outlook is that if improved earnings and expanded shareholder returns align, the depressed stock valuations could recover.

“The recent stock price correction is more a result of short-term supply-demand imbalances than a sign that structural growth potential has been compromised,” explained Director Kim. “As of November, supply-demand imbalances have reached extreme levels due to a surge in short selling of tech stocks and record-breaking selling pressure from hedge funds.” He added, “It is now time to focus on the possibility of supply-demand conditions improving as selling intensity slows and short-covering flows into the market.”