Profit-taking, mixed Wall Street close weigh on chipmakers; brokerages still see ample room for further gains

The Kospi and other indexes are displayed on a screen at Hana Bank's dealing room in Jung-gu, Seoul, on Friday. [Yonhap]
The Kospi and other indexes are displayed on a screen at Hana Bank's dealing room in Jung-gu, Seoul, on Friday. [Yonhap]

Shares of Samsung Electronics and SK Hynix fell 3% and 4%, respectively, in early trading Friday.

The declines came as investors locked in profits following the previous day's sharp gains, compounded by a mixed overnight session on Wall Street.

Samsung Electronics was trading down 3.84% at 344,750 won ($223) as of 10:33 a.m. on the main bourse Friday. The stock opened down 1.26% at 354,000 won before extending its losses.

SK Hynix was changing hands at 2.79 million won at the same time, down 4.35% from the previous close.

Both chipmakers had surged sharply on Thursday — Samsung Electronics by 5.28% and SK Hynix by 13.06%. Analysts attributed Friday's pullback to profit-taking after those steep gains.

The mixed close on Wall Street overnight also weighed on sentiment. The Dow Jones Industrial Average edged up 0.14% on Thursday, while the S&P 500 and the Nasdaq Composite fell 0.01% and 0.46%, respectively.

US memory chipmaker Micron's better-than-expected earnings had lifted markets early in the session, but large-cap technology stocks turned lower after reports emerged that Apple was raising prices across its entire product lineup due to a memory chip shortage and had significantly revised its next-generation chip roadmap.

The concern is that while surging AI demand is a tailwind for chipmakers, it could squeeze margins at big tech companies that sell finished products.

Some market observers also warned that higher prices could dampen consumer demand, which in turn could weigh on the outlook for memory chip prices going forward.

Despite the day's declines, brokerages remain bullish on both Samsung Electronics and SK Hynix.

KB Securities raised its target price for Samsung Electronics on Thursday to 550,000 won from 530,000 won.

Kim Dong-won, head of research at KB Securities, said a meaningful revaluation of the stocks is expected as a sharp earnings recovery driven by rising memory chip prices becomes increasingly visible.

Mirae Asset Securities raised its target price for SK Hynix more aggressively, lifting it to 4.2 million won from 3.8 million won.

Kim Young-geon, an analyst at Mirae Asset Securities, said the brokerage kept its earnings forecast for this year unchanged but raised its operating profit estimate for next year to reflect expectations of higher HBM prices.


jiyun@heraldcorp.com