Semiconductor Industry Nears Peak, Slowdown Expected in Second Half
Analysis indicates that the semiconductor industry's boom is reaching its peak, with growth expected to slow in the second half of the year. Changes are appearing in the performance and stock price trends of major companies like Samsung Electronics and SK Hynix. Kang Gwan-woo, former Executive Director at Morgan Stanley who predicted the bull market in the Korean stock market in the first half of last year, stated that this year's stock market is likely to show a trend of being higher in the first half and lower in the second half. He explained his investment strategy based on the point that corporate earnings growth rates may slow down in the latter half of the year.
Amidst aggressive capacity expansions by Samsung Electronics and SK Hynix, SK Hynix's operating profit margin recently exceeded 60%. Increased electricity costs due to sustained high oil prices stemming from Middle East risks will raise the burden of expenses, impacting corporate facility investments and price negotiation power. Data centers are identified as the largest electricity consumers, and the cost burden is becoming a variable as investments in artificial intelligence (AI) have yet to translate into substantial profits.
While individual investors are responding with bargain-hunting in semiconductor stocks, foreign investors have begun to realize profits. Samsung Electronics' beta is reported to be 1.1, and SK Hynix's beta exceeds 2.0, indicating a gap in the valuation of semiconductor stocks between individual and foreign investors. Stock prices tend to lead earnings, and doubts raised about the profitability of major companies' investments have also affected the outlook for semiconductor earnings.
President Lee Jae-myung has spoken of a '3,000 KOSDAQ era,' and financial authorities are preparing measures to improve the KOSDAQ market. Currently, there are over 1,500 KOSDAQ stocks, many of which have modest earnings but valuations two to three times higher than KOSPI stocks.
Meanwhile, on the 18th, Jeon Young-hyun, head of Samsung Electronics' DS Division, and Lisa Su, CEO of AMD, signed a business agreement at Samsung Electronics' Pyeongtaek fab.