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

Shares of Samsung Electronics and SK hynix tumbled 9 percent and 12 percent, respectively, on Thursday as debate swirled over whether the semiconductor industry has passed its peak — a controversy ignited by Meta's latest move. Compared with their recent highs, the two stocks have now fallen as much as 23 percent and 26 percent. In a single session, the combined market capitalization of the two companies evaporated by 432 trillion won ($278 billion).

Securities firms, however, called the market's concerns overblown and raised their price targets for both companies. Memory chip supply still cannot keep pace with demand, they said, and the earnings outlook for both companies remains solid.

According to Korea Exchange, Samsung Electronics plunged 9.06 percent on Thursday, breaking below the 300,000-won threshold, while SK hynix crashed 14.57 percent to fall into the 2.1 million won range. SK hynix's single-day decline was the steepest since Nov. 20, 2008 — roughly 17 years and seven months ago — when global financial crisis turbulence battered the market.

Other Asian chipmakers were also hit hard. Kioxia Holdings, one of Japan's leading semiconductor companies, fell 13.47 percent on Thursday, while Tokyo Electron dropped 7.44 percent. Chinese chipmakers listed in Hong Kong fared no better: SMIC slid 10.07 percent and Hua Hong Grace Semiconductor tumbled 13.52 percent.

The selloff followed news on Tuesday that Meta, the parent company of Facebook and Instagram, is moving into the AI cloud infrastructure business — stoking fears of overinvestment in AI. Meta is reportedly preparing a service called Meta Compute, which would sell spare computing capacity from its own data centers to outside customers.

Having poured massive investment into expanding AI data centers, Meta now appears ready to flip to the supply side — reselling excess capacity from those same facilities. The move deepened market doubts about whether a semiconductor supply shortage truly persists.

Securities analysts pushed back, calling the market's reaction excessive. Lee Jae-won, a researcher at Yuanta Securities Korea, said Meta Compute first drew attention through media coverage, but the strategy had actually been in development for months. "Meta already set up a dedicated data center division in January, and Meta Platforms CEO Mark Zuckerberg raised the possibility of entering the cloud business at the May shareholder meeting," he said.

Lee added that Meta Compute signals not a surplus of computing capacity but a shift in which AI computing infrastructure is being converted into a sellable cloud asset. "Meta's strategy is less about cutting investment and more about monetizing AI infrastructure to reinvest in AI infrastructure," he said.

Lee Dong-yeon, a researcher at Korea Investment & Securities, said it would be a stretch to interpret Meta's entry into infrastructure leasing as an immediate signal to cut capital expenditure. "Meta recently signed a 1.6-gigawatt computing contract with Crusoe, and at its first-quarter earnings call it raised its capital expenditure guidance for this year by $10 billion while flagging a possible move into AI infrastructure services," he said. "It is hard to conclude that its business strategy has shifted dramatically just two months later."

Despite the Meta-driven turbulence, securities firms raised their price targets for both Samsung Electronics and SK hynix. Korea Investment & Securities set a new target of 590,000 won for Samsung Electronics, while DB Securities raised its target to 360,000 won.

KB Securities and Sangsangin Investment & Securities raised their price targets for SK hynix to 4.2 million won and 3.8 million won, respectively. On Thursday, NH Investment and IBK had set targets of 4.1 million won and 4 million won.

Strong earnings expectations underpin the upgrades. Market consensus puts Samsung Electronics' second-quarter sales at 173 trillion won and operating profit at 85 trillion won. SK hynix is expected to post record second-quarter sales of 83 trillion won and operating profit of 64 trillion won.

Jo A-in, a researcher at Samsung Securities, said the recent volatility in semiconductor stocks looks less like a new negative catalyst and more like a process in which conflicting interpretations of the same phenomenon are unsettling investor sentiment. "In the past, leading stocks have often sustained an earnings-driven uptrend while repeatedly absorbing corrections of 10 to 20 percent," she said.


jiyun@heraldcorp.com