The Kospi and Kosdaq are displayed on an electronic board at the Hana Bank dealing room in Jung-gu, Seoul. [Yonhap]
The Kospi and Kosdaq are displayed on an electronic board at the Hana Bank dealing room in Jung-gu, Seoul. [Yonhap]

Samsung Electronics and SK Hynix tumbled sharply Tuesday as global semiconductor stocks sold off on fears that the sector has peaked and on news of China's push to close the technology gap.

Declines in bellwether chip names including Nvidia and ASML dampened investor sentiment, while caution ahead of a Chinese memory chipmaker's stock listing and earnings announcement added to selling pressure.

Analysts, however, largely interpret the recent pullback as short-term volatility, forecasting that market concerns will gradually ease in the second half of the year as HBM demand, long-term supply agreements (LTAs) and shareholder return policies come into view.

Samsung Electronics opened Tuesday down 6.10 percent at 238,500 won ($163), according to Korea Exchange data. As of 9:45 a.m., the stock was trading down 8.66 percent at 232,000 won. SK Hynix also opened lower, falling 8.48 percent to 1.662 million won, and was trading down 10.79 percent at 1.62 million won at the same time. Both stocks were trading near their lowest levels this month.

The sharp declines in the two chip giants were attributed to weakness on Wall Street overnight. Semiconductor stocks fell again in New York, dragging the tech-heavy NASDAQ Composite down 0.18 percent.

ASML plunged 5.80 percent after reports emerged that China had begun developing deep ultraviolet (DUV) lithography equipment used in chip manufacturing, stoking fears of intensifying global competition. Nvidia fell 4.99 percent, SanDisk dropped 11.02 percent and Micron declined 2.25 percent. The Philadelphia Semiconductor Index shed 2.23 percent. SK Hynix's American depositary receipts also fell 7.47 percent.

Analysts also cited the Monday listing of Chinese memory chipmaker CXMT on the Shanghai Stock Exchange as a negative factor for the supply-demand outlook for both Samsung Electronics and SK Hynix. SK Hynix is set to report earnings Wednesday, and the proximity of that announcement also appeared to heighten market caution.

Despite the selloff, analysts on the whole maintained a broadly positive outlook. While the recent share price correction is real, they said market concerns could ease as the year progresses into the second half.

Son In-jun, a researcher at Eugene Investment & Securities, said of Samsung Electronics that "the recent share price correction stems from doubts about the long-term sustainability of earnings andthe room for further consensus upgrades," but added that "once second-half price negotiations, 2027 HBM pricing, large-scaleshareholder returns and LTA details are confirmed in sequence, market concerns will ease."

He added that earnings would improve, LTAs would demonstrate sustainability, and shareholderreturns would translate into higher per-share value.

On SK Hynix, Son said that "if expanded dividends, share buybacks and cancellations and other additionalreturns proceed alongside announcements of LTA details,it could give the market confidence in the long-term stability of earnings and drive a structuralvaluation re-rating."


th5@heraldcorp.com