"Foreign Investors Join In"... Samsung Electronics-Driven Semiconductor Rally Gathers Strength [Practical Investment]

Semiconductors Shine Amid Big Tech's AI Race
Securities Firms Offer Positive Outlook on Samsung Electronics...
Sobu-jang Stocks Also on the Rise

The investment appeal of the semiconductor sector is rising further, driven by expanding demand from global big tech (large information technology companies). In particular, as expectations for improved performance at Samsung Electronics, the leading semiconductor stock, spread across the industry, positive momentum is also reaching stocks related to materials, components, and equipment.

Semiconductors Shine Amid Big Tech AI Competition

On August 18 (local time), the Philadelphia Semiconductor Index closed at 5,776.31 on the New York Stock Exchange. This marks a 3% increase compared to the beginning of the month, and an 18% surge over the past three months. Hanwha Investment & Securities and others have projected a clear upward trend in the Philadelphia Semiconductor Index's earnings per share (EPS) for 2027 compared to this year and next, maintaining a positive mid- to long-term outlook.

The fact that this indicator, which serves as a "compass" for the semiconductor industry, is showing such a trend is closely related to the recent large-scale artificial intelligence (AI) investments by big tech companies. Last month, Meta announced plans to build AI data centers worth tens of billions of dollars and stated that it would invest $66 billion to $72 billion (about 90 trillion to 100 trillion won) annually to build and expand AI infrastructure. Google's parent company Alphabet also announced it would increase this year's AI infrastructure investment from $75 billion to $85 billion. Even Apple, which had been passive in AI investment, indicated earlier this month that it would expand investment to advance its AI technology. This virtuous cycle of AI infrastructure construction and the resulting increase in semiconductor orders is highly likely to lead to a favorable business environment for semiconductors, including memory and foundry (semiconductor contract manufacturing).

Furthermore, the growth potential of the AI semiconductor industry is expected to be reaffirmed through the earnings announcements of global semiconductor chip manufacturers such as Nvidia (on the 27th of this month) and Broadcom (on the 4th of next month). These companies are expected to post results that exceed market expectations. Han Sanghee, a researcher at Hanwha Investment & Securities, analyzed, "After the quarterly earnings are released, the momentum is expected to strengthen further," adding, "It could be a good opportunity to increase the allocation to AI semiconductors and power devices."

Although U.S. government tariffs on semiconductor products have not yet been finalized, the outlook that the tariff impact will not be significant is also fueling optimism. Kim Rokho, a researcher at Hana Securities, said, "The policy of exempting companies that are producing chips in the U.S. or planning manufacturing facilities from tariffs appears to be maintained," and analyzed, "Since Samsung Electronics and SK Hynix are scheduled to receive subsidies under the CHIPS and Science Act (CSA), the tariff risk is likely to be limited."

Securities Firms Positive on Samsung Electronics... Materials, Components, and Equipment Also Booming

Securities firms are recommending investment focused on Samsung Electronics. This is due to growing market expectations for an increase in market share in the high bandwidth memory (HBM) segment next year. Park Yuak, a researcher at Kiwoom Securities, said, "The yield rates for 1c-nm products and HBM back-end processes are improving, and considering aggressive capacity expansions such as the Pyeongtaek Plant 4, the direction of market share increase is clear," and analyzed, "The stock price is expected to rise on the back of expectations for an HBM performance turnaround."

However, it is noted as a risk that if the quality test results for Samsung Electronics' HBM4 customers are negative, it could have a short-term impact on the stock price.

In addition, the foundry division is being re-evaluated in light of the contract with Tesla. At the end of last month, Samsung Electronics secured a contract worth about 23 trillion won to produce Tesla's next-generation chip (AI6). Researcher Kim commented, "Securing Tesla as a client for the most advanced process indicates a recovery in competitiveness and increases the visibility for acquiring additional clients," adding, "It is reasonable for such expectations to be reflected in the stock price."

On August 18, Samsung Electronics' stock price closed at 70,000 won, marking an increase of nearly 25% compared to the end of May. Following the announcement of the supply deal for Tesla's AI chip products, foreign investors have shown strong buying activity, making it the most net-bought stock by foreigners over the past month. The net purchases by foreign investors amounted to 3.495 trillion won, accounting for 56% of the total net purchases by foreigners.

The positive momentum from Samsung Electronics is quickly spreading to materials, components, and equipment stocks as well. According to securities firms, quarterly earnings for Samsung Electronics-related companies such as Wonik IPS, Eugene Technology, EO Technics, Sinsung ENG, and Komico are expected to rebound from the low point in the first quarter of this year and continue to rise steadily through next year. The outlook is becoming clearer that the business environment will improve further in 2026 and 2027, driven by the construction of Samsung Electronics' Taylor plant in the U.S. and investments in Pyeongtaek Plants 4 and 5.

SK Securities selected Wonik IPS and Komico as their top picks. Wonik IPS is expected to benefit significantly from Samsung Electronics' foundry investments and could generate about 200 billion won in sales by supplying equipment to the Taylor plant. Komico, which operates a semiconductor process equipment cleaning business, is expected to benefit broadly from the expansion of plants by foundry companies, including Samsung Electronics.