"Semiconductors Are Back"... Samsung Electronics Up 3%, SK hynix Up 6%, Lifting KOSPI Again

[Financial News] South Korean stocks were strong in early trading on the 5th, supported by a favorable lead from the United States and easing concerns over Artificial Intelligence (AI) investment. Samsung Electronics and SK hynix, the leading semiconductor stocks that had recently plunged, rebounded together and drove the index higher.
As of 9:59 a.m. on the 5th, Samsung Electronics was trading at 247,500 won, up 3.13% from the previous session. SK hynix was also up 5.90% at 1.67 million won.
The improvement in sentiment toward semiconductors was driven by the overnight strength in U.S. technology stocks. Buying flowed into the global semiconductor sector after major Big Tech firms reaffirmed their commitment to expanding AI investment. As concerns over an "AI investment bubble" that had recently weighed on the market eased, bargain hunting also emerged in Korea's flagship semiconductor names.
Kim Dong-won, Head of Research at KB Securities, analyzed that "major cloud service providers (CSPs), including Google and Amazon, said in their earnings releases that cloud infrastructure bookings are effectively sold out through 2028, and that price increases and improved free cash flow to the firm (FCF) are expected when contracts are renewed in the future." He added that "the market is likely to move from a phase of skepticism about AI investment to one of conviction," and named Samsung Electronics and SK hynix as his top picks.
Kim also assessed that "current fulfillment of memory demand from Big Tech clients is only about 60%, and supply capacity for memory and AI infrastructure is effectively sold out through 2028."
He further explained that "as future cloud contract renewals are expected to come with prices 30% to 40% higher than before, along with more favorable terms, stronger earnings from AI demand companies are likely to lead to a revaluation of the semiconductor sector."


[email protected] Choi Du-seon Reporter