Has the Semiconductor Market Peaked? Market Correction Depends on These Factors

[Anchor]

Semiconductor stocks, which have been leading the rally in our stock market, have seen significant volatility. This has reignited concerns over a so-called "peak-out," suggesting that the semiconductor industry may have already hit its peak and is now on the decline. Whether this shock will be short-lived or mark the beginning of a full-scale downturn depends on interest rates and corporate earnings.

Min Gyeong-ho reports.

[Reporter]

Since last Thursday, Samsung Electronics has seen its stock price drop by 18% over three trading days.

SK Hynix has also plunged 19% over the past four trading days.

With the desire to lock in profits growing after a short-term surge, the earnings report from U.S. semiconductor firm Broadcom late last week added fuel to the downward trend.

As the forecast for third-quarter AI chip revenue fell short of expectations, the market began to question whether massive investments in AI could be sustained.

The expectation that semiconductor demand would continue to outpace supply, driving prices higher, has been dampened.

[Lee Hyo-seob, Head of Financial Industry Research at Korea Capital Market Institute: Because it showed concerns that the overall growth rate of AI facility investment could slow down... (the 'peak-out' concern) is now consistently appearing in the numbers.]

Analysts in the securities industry suggest that it is still too early to conclude that the semiconductor industry has passed its peak and is entering a decline.

The prevailing view is that this is a short-term correction, as U.S. Big Tech companies, whose survival depends on AI, cannot easily reduce investments, and the mid-to-long-term outlook for the semiconductor industry remains intact.

However, there is a consensus that the depth of the correction could vary depending on the pace and scale of U.S. interest rate hikes and the second-quarter earnings of global semiconductor companies, which will be released starting next month.

With inflationary pressure already significant due to the prolonged war between the U.S. and Iran, volatility may increase whenever the possibility of interest rate hikes is raised based on economic indicators released periodically.

[Lee Sang-heon, Senior Research Fellow at iM Securities Research Center: I believe that when the market hits bottom will be determined by the extent of the impact from interest rates and earnings growth...]

The ongoing initial public offering (IPO) of the U.S. space company SpaceX, which is considered the largest in history at 2.6 quadrillion won, is also being evaluated as a negative factor for the stock prices of existing companies.

(Video reporting: Lee Moo-jin, Video editing: Ahn Yeo-jin)
※ Please note: This article was translated by AI and may contain errors.