Semiconductor Stocks, Rebounding on Strong Export Performance?

Semiconductor Exports in October Near $11.2 Billion 'Record High'
Attention on Whether Semiconductor Stocks, Already Reflecting Negative Factors, Will Spark Positive Investor Sentiment

On the afternoon of the 26th of last month, Busan Port was bustling. [Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] While semiconductor stocks such as Samsung Electronics have struggled to recover, related exports have remained robust. Analysts suggest that strong fundamentals could foster positive investor sentiment.

As of 11:17 AM on the 2nd, Samsung Electronics' stock price rose 3.00% from the previous day to 72,000 KRW. This marks a rare upward trend after breaking out of the 60,000 KRW range where it had lingered until mid-last month, but it still falls short of the closing price of 73,200 KRW on the 1st of last month. This indicates that solid earnings and export conditions have not been fully reflected.

According to the Ministry of Trade, Industry and Energy, semiconductor exports last month reached $11.17 billion (approximately 13.14 trillion KRW), a 28.8% increase compared to the same period last year. This ranks as the second highest semiconductor export figure for October on record. Exports have surpassed $10 billion for six consecutive months, and the annual export total through October has exceeded $100 billion. Considering that semiconductor stock prices typically lead export indicators, the recent decline in semiconductor stocks is seen as unusual.

The boom in semiconductor exports is attributed to a favorable market despite the decline in fixed prices for DRAM. Mobile demand increased due to the seasonal peak with new smartphone launches, and the non-memory semiconductor foundry industry also considered price hikes. Kyungmin Kim, a researcher at Hana Financial Investment, explained, "Semiconductor exports have increased for 16 consecutive months, likely due to the diversification of applications where semiconductors are used, along with the expansion of 5G and the Internet of Things, which has increased the amount of semiconductors embedded per device."

Ultimately, with strong fundamentals, there is a forecast that positive investor sentiment could be stimulated. SK Hynix, which is already the second largest by market capitalization, began to rebound ahead of Samsung Electronics. Companies supplying products or services to domestic and international semiconductor clients among materials, parts, and equipment firms are also showing upward trends. Hana Materials and Komico, for example, have risen approximately 10.3% and 8.4%, respectively, based on closing prices from the 20th of last month through the previous day.