Samsung Electronics, SK hynix post worst weekly losses since 2008 financial crisis

Samsung Electronics and SK hynix posted their worst weekly share price declines since the 2008 global financial crisis as the Kospi suffered a historic selloff.

According to Korea Exchange data released Sunday, Samsung Electronics' share price fell 17.8% last week — from 262,000 won ($194) on Monday to 215,500 won on Friday.

That was the steepest weekly decline for the stock since the fourth week of October 2008 (Oct. 20–24), when it dropped 19.3%.

SK hynix fared even worse, plunging 24.3% over the same period from 1.68 million won to 1.27 million won — its largest weekly drop since the third week of November 2008 (Nov. 17–21), when it lost 31.9%.

Record foreign selling drove the rout at both semiconductor giants.

Foreign investors net sold 11.21 trillion won worth of Kospi shares last week, with Samsung Electronics (3.48 trillion won) and SK hynix (5.36 trillion won) together accounting for 78.8% of that total.

The relentless selling pushed Samsung Electronics' foreign ownership rate down to 45.98% as of Friday, the lowest since July 7, 2009, when it stood at 45.96%.

SK hynix's foreign ownership rate fell to 48.85%, its lowest since Dec. 23, 2021, when it was 48.84%.

For the year to date, foreign investors have net sold 208.33 trillion won worth of Kospi shares, of which Samsung Electronics and SK hynix alone accounted for 180.49 trillion won.

Market attention has now turned to whether the two companies can stage a recovery.

Analysts broadly agree that a rebound will require renewed confidence in the durability of the semiconductor upcycle and a return of foreign capital flows.

The industry outlook itself remains largely favorable.

"Given structural changes in the semiconductor industry — such as the expansion of long-term supply agreements and a prolonged supply shortage — the current valuation discount on chipmakers appears excessive," said Lee Jae-won, an analyst at Yuanta Securities Korea.

Recent comments from ASML, which said it would struggle to meet all customer demand through the year after next, and from TSMC, which stressed it sees no signs of demand softening, lend further support to that view.

Kim Dong-won, an analyst at KB Securities, cited those developments in arguing that "the sharp recent correction in semiconductor share prices looks less like fundamental deterioration and more like a temporary price distortion caused by risk-averse sentiment in financial markets."

Still, some analysts caution that a solid recovery will be difficult, noting that domestic and overseas semiconductor stocks have lately been driven more by investor anxiety than by the earnings and outlooks companies have actually reported.

Even as Samsung Electronics, ASML and TSMC posted record results, markets reacted more sharply to concerns about China's technological catch-up in semiconductors and speculation that the pace of AI investment could slow.

Park Jae-hwan, an analyst at Eugene Investment & Securities, echoed that view, saying "given the unfavorable macro environment on top of everything else, it looks difficult for these concerns to be resolved in the short term, and investors should be mindful of the possibility that a period of heightened volatility will continue."

Lee Min-hee, an analyst at BNK Investment & Securities, noted that while sentiment toward AI has recently begun to recover, signs of slowing memory chip demand have actually intensified. "As memory costs approach their limits, big tech companies are pursuing a value-for-money strategy for the AI PCs, servers and physical AI models they plan to release at year-end and next year — boosting performance while cutting memory capacity below original plans to reduce costs," Lee said.