Kospi drops over 3%; semiconductor-related shares fall across the board

Memory, storage stocks weaken on Wall Street as rate-hike fears mount

An image related to Samsung Electronics and SK hynix. [Generated with ChatGPT]
An image related to Samsung Electronics and SK hynix. [Generated with ChatGPT]

Samsung Electronics and SK hynix, which surged last week on optimism over AI semiconductor demand, fell sharply in early trading Monday as profit-taking pressure mounted. Weakness in US memory and storage stocks, combined with growing caution ahead of this week's Federal Open Market Committee meeting, weighed on domestic chip shares.

According to Korea Exchange, Samsung Electronics was trading down 7,250 won, or 2.79 percent, at 252,250 won ($187) as of 9:31 a.m. SK hynix tumbled 88,000 won, or 4.86 percent, to 1.724 million won. The Kospi fell 211.04 points, or 3.05 percent, to 6,698.87 at the same time.

The so-called "S7" stocks — shares linked to Samsung Electronics and SK hynix through equity stakes or business ties — also fell across the board. SK Square dropped 6.34 percent, while Samsung Electro-Mechanics fell 4.43 percent, Samsung Life 4.23 percent, Samsung C&T 3.41 percent and Samsung Electronics preferred shares 3.26 percent.

On Friday (local time), the Philadelphia Semiconductor Index rose 1.81 percent on the New York stock market, but memory and storage stocks bucked the broader rebound. Micron fell 0.22 percent, while SanDisk dropped 3.50 percent, Western Digital 2.98 percent and Seagate 3.73 percent. Despite the wider market's recovery, memory and storage names failed to participate in the rally.

The recent sharp gains have also left investors more inclined to take profits. Samsung Electronics and SK hynix led the Kospi back above the 7,000-point threshold last week, driven by expectations of stronger demand for AI memory chips following the launch of OpenAI's next-generation AI model, Astra. The Kospi climbed to 7,051.64 on Wednesday, reclaiming the 7,000 level on a closing basis, but then fell for two consecutive sessions Thursday and Friday under pressure from rising interest rates and higher global oil prices.

The September FOMC meeting scheduled for this week adds to the uncertainty. The US core consumer price index for August rose 0.3 percent from the previous month, exceeding the market consensus of 0.2 percent and reinforcing expectations of a rate hike. The yield on the 10-year US government bond approached 5 percent immediately after the CPI release.

"The Kospi is expected to see volatility from the start of the week, influenced by last Friday's US August CPI result, the possibility of a rate hike at the September FOMC, the direction of the yen following the Bank of Japan meeting, changes in oil prices and shifts in foreign investor flows," said Han Ji-young, a researcher at Kiwoom Securities.


hajun825@heraldcorp.com