South Korean semiconductor stocks experienced significant gains on Tuesday as foreign investors showed strong demand, driven by increasing optimism for a recovery in memory-chip prices.
Chipmakers Samsung Electronics and SK Hynix Lead the Way
Shares of chipmakers Samsung Electronics and SK Hynix outperformed the benchmark Kospi index, rising 3.1% and 4.8% respectively, while the Kospi gained 1.0% for the day. After 16 consecutive sessions of being net sellers, foreign investors became net buyers of local stocks, leading to Tuesday’s gains.
Foreign Investors Favor Samsung and SK Hynix
According to data from the Korea Exchange compiled by Yonhap News, Samsung and SK Hynix were the top choices for overseas investors during the session. Foreigners purchased 326 billion won ($241.8 million) worth of Samsung shares, as well as KRW146 billion worth of SK Hynix stock. In contrast, shares of carmaker Hyundai Motor, the third most popular company on the list, saw only KRW18 billion in purchases.
Bright Outlook for Chip Stocks
The recent gains in chip stocks can be attributed to growing optimism that the long industry downturn may have reached its lowest point. Market analysts suggest that chip prices have already hit a floor in the third quarter, thanks to industry-wide efforts to reduce output and address a supply glut. Additionally, robust demand for powerful computing chips, driven by the artificial intelligence boom, has contributed to the positive outlook.
Impressive Performance by Samsung and SK Hynix
Shares of Samsung have increased by more than 20% this year, while SK Hynix has seen a surge of over 70%.
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