Is It Not Too Late for Samsung Electronics and SK Hynix? The 'Shocking Numbers' Released by Micron

If you are out, you feel FOMO (fear of missing out); if you are in, it is hard to handle the "crazy and wild" market. This is the scene faced by KOSPI investors in the fourth week of June. On Tuesday, June 23, the KOSPI plunged 910 points (-9.99%) in a single day, collapsing to the 8,200 level. It was the largest single-day drop in the history of the South Korean stock market, occurring just one day after the index hit the 9,000 mark for the first time in history. A rebound began the very next day, and early Thursday morning, when U.S. memory chipmaker Micron Technology released earnings that crushed market expectations, the stock prices of Samsung Electronics and SK Hynix soared again, bringing the index close to the 9,000 mark. However, on Friday, the very next day ahead of the weekend, almost all of the previous day's gains were wiped out, triggering the fifth circuit breaker of the year. In a market that can hardly be called "normal" right now, what on earth should investors hold onto?

Let's first look at this week's biggest event, Micron's earnings announcement. Micron, often called the "bellwether of the memory market" as it reports its earnings about a month ahead of Samsung Electronics and SK Hynix, easily surpassed market expectations, which many had predicted would be "hard to satisfy." Amid the dazzling numbers presented during the earnings call, let's look at the core details. Its gross margin jumped from 75% to 85% in just one quarter, and the company projected 86% for the next quarter. This is not only a number that seems impossible in general manufacturing, but it is also a "game-breaking" gross margin that surpasses even Nvidia (75%), which virtually monopolizes the "AI accelerator" market. It reaffirmed that no company can currently match the pricing power of the "big three memory makers" that oligopolize memory chip manufacturing, making them the "ultimate power" even over Nvidia. In this market, where not only the "inherently expensive AI memory" HBM but also general-purpose memory product prices have surged about tenfold in a year, phenomena that cannot be explained by pre-AI boom logic are occurring everywhere. 

What drove up the value of memory chips like this are hyperscalers such as Google, Microsoft, and Meta, which are focusing heavily on AI investments. Apple raised the prices of its major product lines, including the MacBook Pro, saying, "We have no choice because memory chip prices are too expensive." How long will this state of affairs—where these companies are pouring virtually almost all of their net profits into "AI investments"—continue? Micron offered a sort of answer to this. This answer is also the response to the market's current "sustainability concerns." What was that answer? 

Even last quarter, immediately after Micron announced very strong earnings, its stock price fell by 28% over two weeks. However, ahead of the earnings announcements of Samsung Electronics and SK Hynix, investors began relying on memory semiconductors again starting in April, leading to the soaring stock prices of the "big three memory makers" in the second quarter, as we well know. Currently, the prevailing outlook is that a similar pattern will emerge in the third quarter.

The issue for Samsung and Hynix is not their current earnings and stock price outlook. Concerns are growing over the "concentration" phenomenon, where these two giants are virtually swallowing up the South Korean stock market. On "Black Tuesday," June 23, which saw the largest drop in the history of the South Korean stock market, there was no external "excuse" to blame for the crash. Interest rate movements were calm, and oil prices were continuing to fall. Although there were some concerned voices in the New York stock market regarding the burden of AI investments on big tech companies, the Taiwanese stock market led by TSMC and the Japanese stock market, where Kioxia reclaimed the top spot in market capitalization, did not experience a "crash" as severe as ours. This "crazy volatility" shown by the South Korean stock market is a problem unique to South Korea. In a market where Samsung and Hynix already account for 70% of the total market capitalization, "single-stock two-times leverage" products for the two companies have emerged, sweeping the market daily with an unprecedented level of concentration. Furthermore, South Korea's inclusion in the MSCI developed market watch list, which was hoped to help reduce the scale of foreign investors' "rebalancing," fell through. 

A market where staying on the sidelines makes you fear falling behind, yet jumping in makes the volatility hard to bear. In this phase, where should you set the "anchor" for your money? In <Ttoksori E>, reporter Kwon Ae-ri breaks it down clearly for you.

1. Did Micron 'leak' the report card for Samsung and Hynix?
2. "Even in 2027, we won't have enough to sell~" Semiconductor companies are indeed the 'ultimate power'!
3. Watch out for stock market volatility immediately after dazzling earnings announcements!
4. 'Sprinting' while taking on debt: "AI investment comparable to the railway revolution"
5. KOSPI swallowed up by Samsung and Hynix

Reported by Kwon Ae-ri | Video by Park Woo-jin and Hwang Se-hoe | Produced by Kim Eun-ji and Jeong Seo-woo | Edited by Chae Ji-won | Graphics by Chae Ji-woo | Produced by Intellectual Content IP Team
※ Please note: This article was translated by AI and may contain errors.