Has semiconductor winter arrived again? Diagnosis of sluggish demand and oversupply of memory semiconductors, theories about an artificial intelligence (AI) bubble, and concerns about economic slowdown in the United States and China have all combined to cause foreign investors to sell off Samsung Electronics and SK Hynix shares for about 10 trillion won (about 1.8 trillion yen) over the past month. Samsung Electronics and SK Hynix account for 29% of the total operating profit of the stock market, so the market trends of these two companies are directly linked to the performance of the Korean stock market. However, some have concluded that such talk of a crisis is premature. This is because semiconductor companies such as Micron continue to perform well, and there is a high possibility that the U.S. economy will make a soft landing. Amid talk of a tough semiconductor market, Samsung Electronics’ performance for the July-September period is expected to determine the direction of not only the semiconductor market but also the Korean stock market. Over the past month, foreigners sold more than 8 trillion won in Samsung Electronics shares and more than 1 trillion won in SK Hynix shares. As a result, Samsung Electronics’ stock price, which was 76,100 won on the 26th of last month, fell to 64,200 won on the 27th. This is despite the fact that semiconductor stocks soared on the 25th (local time) due to unexpectedly strong earnings from US company Micron. Foreign investors are pulling out of Samsung Electronics and SK Hynix in South Korea, which has kept the Korean stock market stuck in a slump, unlike the U.S. stock market, which has hit record highs thanks to the Federal Reserve’s interest rate cuts. On the 25th, most global stock markets rose following the People’s Bank of China’s interest rate cut, but the Korea Composite Stock Price Index (KOSPI) was the only one that fell by more than 1%. Typically, a cut in interest rates in China acts as a positive factor for many countries as it raises expectations of increased exports due to a revitalization of China’s domestic demand market. South Korea, which has a high ratio of exports to China, is a prime example of a country that will benefit from this. Despite this, the KOSPI closed at 2,596.32, down 35.36 points (1.34%) from the previous day. The KOSDAQ also closed down 8.05 points (1.05%) at 759.30. Behind this slump in the Korean stock market lies the “peak of semiconductors” theory. The view is that business conditions for memory semiconductors will peak (decline after peaking) in the October-December period. This is because demand for memory semiconductors for smartphones and PCs is weaker than expected. In fact, semiconductor business conditions have weakened further recently. The Korea Institute for Industrial Economics and Trade’s Semiconductor Industry Conditions Expert Survey Index (PSI) was 156 last month. Although it is still above the benchmark of 100, the Semiconductor Business Conditions PSI, which rose to 185 in June, has been on a downward trend since then. Meanwhile, foreign investors accelerated selling after Morgan Stanley predicted that the DRAM and high-bandwidth memory (HBM) markets could reach an oversupply situation by 2026. One good thing is that the recent foreign selling does not appear to be a panic sell. Recently, the interest rate on US “speculative-grade corporate bonds” has fallen to an all-time low. Usually, when funds flow out of speculative-grade corporate bond funds, panic selling is seen in emerging countries such as South Korea, but the low interest rates charged on speculative-grade corporate bonds means that there is no clear outflow of funds. Regarding the recently circulating theory about an artificial intelligence (AI) bubble peak, many people say it is “premature.” Nomura Securities also said in a recent report that some concerns about the memory market, such as an oversupply of HBMs, are exaggerated. Furthermore, there are signs that selling is calming down for the time being following Micron’s strong earnings report on the 25th. Still, it’s hard to be optimistic about the situation. In its report, “Concerns over slowdown in South Korea’s export growth rate,” the International Finance Center assessed that increased semiconductor production and supply by Chinese companies could weaken the trend of growth in South Korea’s semiconductor exports. The key is where the US and Chinese economies go. The United States is showing signs of economic contraction and a cooling labor market. The reason why the Federal Reserve carried out the big cut (a 0.5% cut in the policy interest rate) was also largely due to an attempt to respond preemptively to the economic slowdown. The full text below is from the source: JoongAng Ilbo Japanese Edition 2024.09.28 13:57.
>>1 Japan, Europe, America and Taiwan are doing great. The peninsula has already been abandoned by America. They’ve been transferring too much technology to China and they’re not making any progress.
EE Times Published on March 1, 2024 at 16:30 Samples of the 36GB version will be shipped soon “Micron begins mass production of 24GB HBM3E to be used in NVIDIA’s “H200″ GPU” Micron Technology has begun mass production of the 8-layer stacked 24GB HBM3E (High Bandwidth Memory 3E). Apply the 1β process. It will be installed in NVIDIA’s H200 Tensor Core GPU, which will begin shipping in the second quarter of 2024. It consumes 30% less power than competing products. It’s no surprise that Micron’s performance is improving. They’re ahead of SK Hynix. Can Samsung and SK Hynix achieve 30% lower power consumption?
I think Kioxia and WD of the US will also merge. If that happens, their NAND memory market share will be almost the same as Samsung’s. I think Samsung’s survival will be in real danger from now on.
Well, if you keep pushing twice as hard until you win, you will eventually win. Korea is a society with a very low hurdle for borrowing, which means you’ll never be short on seed money. Just keep borrowing and keep the economy going.
It doesn’t really matter what happens to Samsung, since Korea is already heading straight for ruin, but it’s crazy that 70% of the nation’s assets are in real estate, so the bubble is bound to burst at some point, and as real estate prices fall, Koreans’ assets will be blown away, and riots are bound to break out.
Even though it means that materials and manufacturing equipment will also be in decline, the Japs are somehow happy. They must be really concerned about Koreans on a daily basis.
Korea isn’t the only country that makes semiconductors, so if Korea were to fall, other countries’ manufacturers would flourish, so it wouldn’t have any impact.
Apparently 32 trillion won is not enough this year lol South Korea sells off a large amount of state-owned real estate for less than the appraised value… media outlets say “Insufficient tax revenue is the cause” and “Public utility fees also need to be raised” September 26, 2024.
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