Will the Market Defend Its Lows or Break Through 7,000? An Expert Looks at This Week's Stock Market Variables

[Financial News] As concerns over a semiconductor bubble have recently surfaced, analysts say it is difficult to conclude that the market is in oversupply because of physical constraints such as power, land and DRAM shortages. One expert said the decline in semiconductor stocks was driven more by supply-demand pressure and forced deleveraging than by a worsening industry outlook. He added that the key question for this week's market is whether it can hold its lows and move above the 7,000 level, which would help confirm a bottom.

On the 27th, in a video posted on Sampro TV, Park Byung-chang, CEO of MP Partners, dismissed the bubble theory surrounding semiconductor stocks. He said that because power, land and DRAM are all in short supply, even if big tech companies increase investment, it is unlikely to lead to excessive supply in the short term.

Park also pointed to the decline in margin balances among individual investors as a factor supporting a market rebound. He said that individual margin balances fell by about 5 trillion won in July alone, indicating that leverage reduction is continuing. Park stated, "Individual investors' margin balances are falling sharply," and added, "Deleveraging is underway, and this trend seems to be having a major impact on the market."

Regarding the drop in semiconductor stocks, he said supply-demand pressure is playing a larger role than industry fundamentals. Park said, "This time, supply-demand factors are quite strong," and noted, "Even though semiconductor analysts and CEOs of those companies are saying the shortage will not end soon and that the stocks are undervalued, prices are still falling." He said excessive forced selling from leverage and anxiety over volatility deepened the losses.

Park also rejected the bubble theory for semiconductors, citing remarks by NVIDIA CEO Jensen Huang. He said, "Even if big tech companies want to deploy capital, a bubble burst within five years is impossible because of physical constraints," and added, "There is not enough power, land or DRAM, so even if they want to build massively, they physically cannot." He went on to say, "The structure simply does not allow excessive expansion."
He also pointed to the direction of subscription funds for ChangXin Memory Technologies (CXMT), a listed company on China's STAR Market, as another variable. Once the subscription process is completed, the returned funds could flow back into major global semiconductor stocks such as Samsung Electronics, SK hynix and Micron.
Unlike some negative assessments of the San Francisco AI Summit, Park said the government's participation itself was meaningful. He viewed the government's involvement and the establishment of a declarative and institutional framework as a positive development. He added that the market also took it positively, helping AI-related stocks such as Samsung SDS and Naver rally strongly.
Park said the way the market interprets information can have a greater impact on stock prices than the information itself. He said, "The distribution channel is more important than the source of information," and added, "A stock does not rise simply because a company is good; the environment matters." He also explained that "the same information can lead to different outcomes depending on how people interpret it."
For this week's market, he said the key is whether the previous low holds. Park said, "I said all last week that this would be a week to confirm the bottom," and added, "If the market does not break the low this week and moves above 7,000, the likelihood that a bottom has been confirmed becomes much higher."

Meanwhile, major big tech earnings releases and the Federal Open Market Committee (FOMC) meeting remain key variables for the market this week. With expectations widely favoring an interest rate hold, there is still time until the next meeting in September, which could ease some of the market's burden.


[email protected] Han Seung-gon Reporter