"Do We Need More Semiconductors?" Doubts Trigger Plunge in Samsung and SK Hynix

[Anchor]

The KOSPI plummeted nearly 8% today, July 2, falling below the 8,000-point mark. Concerns over a potential peak in the semiconductor market have resurfaced, leading to a sharp decline in shares of Samsung Electronics and SK Hynix. The spark for this downturn was ignited by the major U.S. IT firm, Meta.

Min Gyeongho reports.

[Reporter]

The lingering doubt that has shadowed semiconductor companies as they hit record highs day after day was whether chips would truly sell as much as currently expected.

Consequently, whether hyperscalers—the largest consumers of semiconductors—might reduce their investments has become a matter of intense interest.

However, news broke that Meta, one of these hyperscalers, is planning to enter the cloud business by selling excess capacity from its existing data centers to third parties.

This led to suspicions that if they have enough AI resources to sell to others, the demand for more semiconductors might not be as high as previously thought.

The Philadelphia Semiconductor Index, which tracks 30 major semiconductor companies, fell more than 6% overnight. The KOSPI also gave up the 8,000-point level today, closing at 7,648, a sharp drop of 7.9%.

Samsung Electronics fell by more than 9%, while SK Hynix recorded a significant decline of 14.57%.

Reports that Apple is pursuing contracts with Chinese semiconductor firms due to rising memory prices further dampened investor sentiment.

While the index has frequently plunged recently due to talk of a semiconductor market peak, the prevailing view in the market is that it is still too early to conclude that the peak has passed.

[Han Ji-young / Research Analyst, Investment Strategy Team at Kiwoom Securities: Since the stocks had risen significantly, investors were looking for a moment to take profits. This news simply acted as a trigger, background, or justification; I find it difficult to view it as a fundamental negative factor.]

Analysts point out that Meta's plan to resell AI resources was already mentioned back in May when semiconductor stocks were surging. They argue that factors confirming strong demand—such as rising memory prices, increased data center rental fees, and long-term semiconductor supply contracts confirmed in Micron's recent earnings report—remain unchanged.

For now, the preliminary earnings announcement from Samsung Electronics on July 7 and the Nasdaq listing of SK Hynix on July 10 are expected to be key variables for the Korean market.

However, as high volatility is expected to persist, warnings are being issued to exercise caution against hasty trading.

Reported by Min Gyeongho | Video by Kim Se-gyeong | Video Editing by Kim Jin-won
※ Please note: This article was translated by AI and may contain errors.