[Anchor]

Experts interpret that this plunge was driven by a combination of factors, including China's pursuit in semiconductors, concerns over interest rate hikes, and weakened investor sentiment. Attention is now focused on whether the U.S. benchmark interest rate decision tomorrow (the 30th) and this week's earnings reports from Big Tech companies can reverse the market sentiment.

Following is the report by Min Gyeongho.

[Reporter]

The biggest shock to the stock market was the news that China has set out to develop DUV equipment.

It is a deep ultraviolet lithography equipment that draws circuits on silicon wafers using light, serving as a core facility for semiconductor manufacturing.

The technology is virtually monopolized by ASML of the Netherlands, and exports to China have been banned since 2019.

This led to concerns that if China succeeds in mass-producing DUV and further emerges as a major supplier in the memory market, the profitability of Samsung Electronics and SK Hynix, which would be forced into competition, could decline.

With investor sentiment already fragile due to repeated sharp fluctuations driven by theories that the semiconductor market has peaked, news of the successful listing of Chinese DRAM company ChangXin Memory Technologies and the DUV development broke, and fear regarding Chinese semiconductors swept the market.

[Han Ji-young / Research Analyst, Kiwoom Securities: As psychological stamina has been largely depleted, the drop in stock prices was significantly driven solely by news such as the development of DUV lithography equipment from China....]

Given that ChangXin Memory also fell by nearly 4% yesterday, some opinions suggest that it was interest rates that created the overall downward atmosphere.

The argument is that doubts are spreading over whether U.S. Big Tech companies, which borrow heavily to buy semiconductors, will be able to continue spending in an environment of rising interest rates.

[Lee Sang-heon / Senior Research Fellow, iM Securities Research Center: (For semiconductor-related investments) they have no choice but to keep issuing bonds. What do they want a lot from heavily indebted Big Tech companies? They want high interest costs, even more so. When Meta tried to issue bonds a few days ago, investors demanded 7%.]

While the general consensus is that the decline is excessive despite market concerns, the immediate focus is on the U.S. benchmark interest rate to be decided early tomorrow morning.

Even if rates are frozen, it is crucial whether signals strongly implying the possibility of future hikes will emerge.

In addition, experts suggest that in the earnings announcements of SK Hynix, Samsung Electronics, Microsoft, and Meta starting today, hints regarding future investments and demand, rather than quarterly earnings, will determine the direction of the market.

(Video Reported by Lee Byung-joo, Lee Moo-jin | Video Edited by Park Ji-in)