Samsung Electronics and SK Hynix rebounded on Wednesday as bargain hunters returned to South Korea's semiconductor trade, following a brutal session that saw foreign investors dump a combined 3.72 trillion won of the two chipmakers.
Samsung rose about 3% and SK Hynix roughly 2% in early trading, helping the KOSPI jump more than 2% before gains were pared back. The bounce came after Tuesday's collapse, when Samsung fell 7.39% and SK Hynix dropped 10.09%, driven by a foreign exodus that totaled 4.52 trillion won of KOSPI shares, with the two stocks accounting for about 82% of that selling.
Valuations Near Historic Lows
Analysts suggest the sell-off may have overshot fundamentals. KB Securities research head Kim Dong-won said the two stocks appeared to have formed a "second trough" in a W-shaped rebound, arguing that the decline reflected supply-demand instability and heavy foreign selling more than deterioration in the semiconductor business.
Valuations have compressed quickly, with both stocks now trading around three times earnings and 1.4 times book value, close to previous periods of extreme pessimism. The buyer thesis is straightforward: share prices fell much faster than profit forecasts.
AI Demand Remains Intact
While China's CXMT is advancing in DRAM, posing a medium-term threat to pricing power, near-term demand from hyperscalers and AI infrastructure customers remains strong. Mirae Asset Securities executive Seo Sang-young noted that recent improvement in US AI semiconductor shares and steady performance from major AI demand companies could stimulate buying interest, even though supply-demand instability may persist.
The Philadelphia Semiconductor Index fell only about 0.2% on Tuesday, a sharp moderation from the previous session's 2.7% rout, easing pressure spilling from Wall Street into Seoul.
Foreign Flows to Decide Sustainability
The strongest confirmation signal is whether foreign investors keep buying. At 9:12 a.m. Wednesday, foreigners had switched to 44.2 billion won of net KOSPI buying, but by around 10:20 a.m., they had turned net sellers again, offloading 134.1 billion won as the KOSPI pared most early gains.
Hana Securities researcher Kim Du-eon said he still expects an upward trend in Korean equities, but argued that easing inflation and interest-rate pressure, manufacturing recovery and won stability will be important for sustaining foreign spot purchases.
Wednesday's US inflation report therefore matters directly. A hotter reading that pushes Treasury yields higher could quickly test the rebound, while a calmer rates backdrop would make it easier for foreign money to return.
This article is for informational purposes only and does not constitute financial advice.
