Democratic Win Raises Semiconductor Concerns, Republican Victory Brings Tariff Pressure

[Anchor]

The reason the U.S. midterm elections matter so much is that whichever party takes control of the Senate and the House will have a major impact on our economy. If the Democrats sweep both chambers, arguments to regulate the pace of AI development are likely to gain momentum. Otherwise, President Trump's existing policy stance is expected to remain in place.

Reporter Lee Seong-hoon has the analysis.

[Reporter]

Yesterday (November 3), the KOSPI plunged 3.6% once again, sliding down to the 5,600 level.

In particular, semiconductor giants Samsung Electronics and SK Hynix plummeted by over 4% and 5% respectively. This is interpreted as the result of growing concerns over the profitability of AI investments, coupled with wariness that the Democrats could win the U.S. midterm elections.

The U.S. midterms are considered a variable that will affect not only the investment direction of the AI industry but also the domestic stock market.

This is because the direction of regulations could shift depending on the election outcome.

If the opposition Democratic Party wins, the semiconductor industry could feel the impact first.

The Democrats maintain the stance that the speed of artificial intelligence development should be slowed down until safety is secured, and that regulations on the construction of data centers should be tightened because they harm the environment.

[Kim Jae-seung / Researcher, Hyundai Motor Securities: Delays in building AI data centers reduce profitability, and from the perspective that concerns are growing over whether South Korean memory semiconductors will be purchased less in the long run, we believe the stock market could be affected.]

However, if AI investment within the U.S. contracts, interest rates could fall and the dollar could weaken, which could be positive for our companies in the short term.

Conversely, if the Republicans win or secure enough seats to at least block the Democrats, President Trump's policies are projected to continue.

As investments in artificial intelligence and other sectors continue, favorable conditions for exports and production could be maintained.

However, the burden remains that tariffs could be used to more strongly pressure South Korea and its companies, and interest rates and exchange rates could fluctuate as the U.S. government takes on more debt.

Regardless of which side wins, opportunities and threats coexist for us, making it time for the government, corporations, and individual investors alike to make meticulous preparations.

(Video Editing: Lee Sang-min, VJ: Jeong Han-wook)
※ Please note: This article was translated by AI and may contain errors.