"Already down 30% — I dread Monday."
"I'm down 40%. The losses are so deep I can't even get out."
A public holiday offered a brief reprieve. On Thursday (local time), major semiconductor stocks tumbled across the board in New York, rattling retail investors holding shares in Samsung Electronics and SK Hynix. With South Korean markets closed for Constitution Day, the immediate fallout was avoided — but investors fear a fresh plunge when trading resumes Monday.
SK Hynix shares fell 11 percent Thursday to close at 1.84 million won ($1,240), while Samsung Electronics dropped 8.77 percent to 255,000 won. Both stocks have now shed nearly 40 percent from their recent peaks. The sell-off that swept semiconductor stocks in New York had already spilled over into domestic markets.
Investors who thought the chip stock rout had run its course were proven wrong. SK Hynix's American depositary receipts plunged 13.69 percent in New York on Thursday. Memory chip-related names took the heaviest losses — Micron fell 5.65 percent, SanDisk dropped 12.63 percent, Seagate Technology slid 10.00 percent and Western Digital lost 9.15 percent.
Shares of Japanese chipmaker Kioxia also fell to roughly half their all-time high set about a month ago.
The Constitution Day holiday kept South Korean markets closed, sparing local investors from the immediate impact of the overnight rout in US chip stocks. Even so, anxiety is running high, with investors voicing fears that "Monday is going to be brutal."
The trigger for the latest sell-off was TSMC, widely seen as a bellwether for the semiconductor industry. The company posted record second-quarter earnings but announced a sharp increase in capital expenditure, stoking fears that chip stocks have peaked.
Paul Nolte, a market strategist at Murphy & Sylvest, attributed the market weakness to "purely a weighting issue" with semiconductors inside the S&P 500. "Three or four years ago they were 8 percent of the index — now they're over 20 percent," he said.
He added that one reason for the chip sell-off is that "investors are starting to do the math," asking what happens once semiconductor demand is eventually satisfied.
Chey Tae-won, chairman of the Korea Chamber of Commerce and Industry, pushed back on the pessimism surrounding SK Hynix's share price, saying memory chips "will keep being needed, so given time, the stock will trend upward."
Speaking Friday at an AI forum during the Korea Chamber of Commerce and Industry's summer forum in Jeju, Chey said he could not predict where the share price would be next month, but advised investors to "hold on rather than buying and selling — that is the best way to preserve your wealth."
He also said that while "AI is still like a four-year-old child, it will inevitably need memory chips to grow up," adding that demand for memory "will have no choice but to grow exponentially."
park@heraldcorp.com
