Korean chip stocks rebound after overnight US selloff, as chip supply remains tight
FILE PHOTO: The logo of Samsung Electronics is seen at the company’s store in Seoul, South Korea, April 15, 2025. REUTERS/Kim Hong-Ji/File Photo
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SEOUL, July 8 : Shares of South Korean chipmakers Samsung Electronics and SK Hynix rebounded on Wednesday after early losses, as investors bought the dip following a sharp selloff fuelled by concerns over the sustainability of the AI-driven chip boom.
Samsung rose as much as 1.4 per cent and SK Hynix climbed as much as 5.8 per cent in morning trade, after earlier falling as much as 4.4 per cent and 5 per cent, respectively, as they initially tracked an overnight decline in U.S. semiconductor stocks.
Analysts said the earnings season is only just beginning and expectations for strong results from chipmakers remain intact. They added that memory chip supply is still expected to remain tight through the third quarter, underpinning bargain buying after Tuesday’s selloff.
Optimism surrounding SK Hynix’s planned U.S. listing also supported investor sentiment.
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Even so, analysts cautioned that while memory pricing is expected to remain favourable for suppliers in the near term, price increases in the second half of 2026 are likely to moderate from the first half because of a higher comparison base.
Park Yuak, an analyst at Kiwoom Securities, cut his target price for Samsung by about 9 per cent to 390,000 won ($257.15), saying rising prices for components such as CPUs and package substrates were pushing up PC and smartphone prices, making customers more cautious about additional memory purchases.
Samsung shares last traded at 290,000 won.
JPMorgan said in a note that memory prices would remain the key driver of earnings in the second half, as supply continued to lag demand despite growing customer resistance to higher costs. The bank added that NAND conventional chip pricing could outperform investor expectations, supported by strong demand from U.S. hyperscalers.
The rebound followed a broad overnight selloff in U.S. semiconductor shares, with Intel, Micron and AMD falling 9.7 per cent, 4.7 per cent and 6.5 per cent, respectively. The Philadelphia Semiconductor Index also lost 4.7 per cent as investors questioned whether AI-related spending could be sustained.
The selling was triggered by Samsung’s second-quarter preliminary earnings on Tuesday, after the chipmaker’s estimate of a 19-fold jump in quarterly operating profit failed to satisfy investors’ lofty expectations despite robust demand for AI memory chips.
Samsung’s shares tumbled, fuelling a broader retreat from AI-related investments that later spread to Wall Street.
($1 = 1,516.6000 won)
Source: Reuters
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