Where is the end of semiconductor stock slump... "The reality of industry concerns will soon emerge"

Foreign Securities Firms' Sell Reports Worsen Investor Sentiment
Possibility of Continued Correction Amid Economic Slowdown Remains
"Micron's Earnings Are a Variable... Current Decline May Be Excessive"

Semiconductor stocks are languishing amid concerns over the memory market conditions. The securities industry warns that additional declines may remain due to the economic slowdown, and expects that the earnings announcement of Micron Technology (on the 25th local time) will reveal the reality of concerns about the semiconductor market.

According to the Korea Exchange on the 24th, the KRX Semiconductor Index recorded 3,255.47 based on the previous trading day's closing price, down 32.03% from the peak in July. This is the worst performance among all sector indices during the same period. In particular, SK Hynix (-34.81%), Samsung Electronics (-29.51%), and Hanmi Semiconductor (-37.56%), which hold a large weight in this index, plunged sharply.

This weakness in the semiconductor sector is interpreted as being influenced by net selling from foreign investors. In particular, investment sentiment worsened following a report by the foreign securities firm Morgan Stanley forecasting a downturn in the semiconductor market. Park Seok-hyun, a researcher at Woori Bank, said, "Due to concerns that the memory semiconductor market has passed its peak, foreigners have net sold about 8.9 trillion won centered on semiconductors since last month," adding, "The risk of a full-scale downward revision of earnings forecasts for the semiconductor sector this year and next year is emerging."

In the securities industry, there are warnings that additional declines may occur as Nvidia, the leading semiconductor stock in the U.S. market, wavers. Kang Dae-seung, a researcher at DB Financial Investment, said, "A slowdown in revenue growth of companies leading the future with innovative AI-related technologies, such as Nvidia, can lead to a decline in corporate valuation and a downward trend in stock prices." He added, "The revenue growth rate of leading semiconductor stocks may further decrease due to the sluggish real economy," explaining, "This is because the recent relationship between job openings and unemployment rate is at a point where the unemployment rate could rise sharply."

Market attention to gauge the future direction of semiconductor stock prices is focused on Micron's earnings announcement, which experienced a stock price adjustment due to concerns over oversupply of High Bandwidth Memory (HBM). Kang Jin-hyuk, a researcher at Shinhan Investment Corp., mentioned, "Micron's stock price has been weak following a poor earnings outlook last quarter, and recently, an oversupply of DRAM and price declines are expected," adding, "This earnings announcement will be an event that can confirm the reality of concerns about the semiconductor market and will have a significant impact on domestic semiconductor investment sentiment."

Lee Seung-woo, head of the research center at Eugene Investment & Securities, also pointed out, "Micron's investment stance, which will be announced this week, seems important." However, Lee noted that semiconductor stock prices currently reflect risks excessively. He diagnosed, "The supply-demand balance of memory will not collapse as sharply as in the past," and said, "If memory companies do not engage in indiscriminate investment expansion, the 'memory winter' is still quite far away. Currently, it is rather a phase where price merits have increased."