Semiconductors Waver on AI Slowdown Talk

This is a period when individual stock earnings and news have a greater impact on stock prices than macroeconomic uncertainties.

Even in today's market, certain semiconductor stocks showed strength, with SFA Semiconductor rising 14%. This is due to individual catalysts, such as Samsung Electronics focusing on high-bandwidth memory (HBM) post-processing and outsourcing general DDR volumes to SFA Semiconductor.

Therefore, while interest rates still have an impact, market attention is rotating towards individual companies with positive news and growth drivers.

For these stocks, the Q4 and next year's outlooks are more important than short-term earnings.

It is essential to identify the reasons for earnings adjustments and how they are expected to change the company's fundamentals, rather than just the target price itself. Short-term earnings fluctuations are of little significance.

Memory semiconductor stocks have shown strength since bottoming out on July 30. SK Hynix rose 38% and Micron rose 25%, showing better returns compared to software stocks.

Despite the recent short-term correction, no significant changes have occurred in the fundamentals of memory semiconductor companies. While market concerns could increase if Micron's stock price turns negative, it has maintained a robust trend so far.

Recent market talk of an AI slowdown, or even its demise, is likely an overreaction. This discussion is similar to what the software industry experienced in February of this year, when there were concerns about investment halting, but solid growth continued.

It is still uncertain whether concerns about data center and AI investment halting will materialize. Currently, AI model development companies and major big tech firms are continuing their investments based on robust cash flows.

Therefore, a reduction in semiconductor investment is likely a groundless fear, and it is premature to judge the market situation.

This is due to Dow mentioning the possibility of a breakthrough with LFP cathode materials.

SK Innovation also successfully rebounded, recovering its 140,000 won support level. This shows a mixed trend between the refining and secondary battery sectors.

This is a result of increased stock-specific volatility as the market recently entered a rotation driven by supply and demand.

Leading stocks that had risen yesterday saw significant declines today, which is interpreted as a repetitive pattern where investors gravitate towards a specific theme and then pull back.

Several positive earnings outlook reports were published for LG Energy Solution. Expectations for Q3 earnings are growing, with a target price of 510,000 won presented in a report titled 'Finally a Surprise'.

Recently, there has been a trend among securities firms to raise target prices for secondary battery companies. This reflects a positive outlook for the secondary battery sector as a whole.

Robot reducer and actuator related stocks such as Samhyun and SPG surged. Samhyun hit its upper limit amid speculation of potentially entering Samsung Electronics' core actuator supply chain after receiving a call from the company.

Samsung Electronics is expected to announce humanoid-related specifications at CES 2025, so related robot component stocks are projected to maintain momentum until then.

This is interpreted as Samsung Electronics' commitment to expanding its robot business positively impacting the stock prices of related component companies.

The AI slowdown theory is having a greater impact on investors than the AI bubble theory. However, some point out that linking a slowdown in development directly to a decrease in investment is a logical leap.

There is also a possibility that the remarks by Anthropic's CEO are being used as a weapon by certain forces, such as hedge funds, to negatively influence the market. The scarcity of computing resources for actual service deployment remains an ongoing issue.

Therefore, it is crucial to carefully analyze the essence and intent of the AI slowdown theory and be cautious about immediately linking it to a reduction in investment.

Anthropic is exhibiting aggressive business behavior, launching new financial services and pursuing an IPO within this year. This contrasts with OpenAI, which has postponed its IPO schedule to next year.

OpenAI is also continuing its infrastructure investments and model upgrades, demonstrating its efforts to maintain leadership in the AI market. Political background related to this was also mentioned in a conversation between former President Trump and NVIDIA CEO Jensen Huang.

Although this news comes from Taiwanese media, it corroborates the severe shortage of server semiconductors.

Despite the price increase, there is strong market demand to prioritize securing supply. This indicates that buyers are losing bargaining power in a supply-constrained environment.

Anthropic will have to provide specific explanations regarding the AI slowdown theory if it lists in November.

Through these events, the market can gain a clearer understanding of the actual scale and outlook of AI-related investments. A recovery in investor sentiment is likely to be fully observed between October and November, after these events.

The current market supply and demand situation is messy due to persistent selling by foreign investors. Foreigners have been steadily selling in the spot market, and buying by individual investors alone is not enough to drive a market rebound.

Especially in the futures market, foreigners recorded net selling of 1.6 trillion won, putting downward pressure on the overall market. This supply and demand situation is likely to continue for some time, and selling pressure may emerge during any rebound in tomorrow's market.

In conclusion, a strong market rebound is unlikely unless foreign selling subsides.

This occurred overnight in the New York market and also moved above 5% again during the domestic trading session.

Some are even suggesting the possibility of the US Treasury yield reaching 6%. This high-interest rate environment increases the need for risk management and proactive responses in investment strategies.

The possibility of the Clarity Act passing the Senate is increasing. For this bill to pass the Senate, six Democratic senators would need to break ranks and vote in favor. Former President Trump's acceptance of crypto regulations raises the possibility of him allowing the bill to pass.

If such a political exchange occurs, the bill's passage could lead to increased demand for short-term bonds and contribute to interest rate stabilization. This would act as a positive factor, alleviating some market uncertainty.

However, even after the bill's Senate passage, actual enactment, including House procedures, is expected to take over six months. Therefore, in addition to short-term expectations, the bill's progress should be monitored from a long-term perspective.

The final passage of the bill and its timing will be an important variable in future market movements.

The current stock market is moving within a box range of 6,400 to 7,050 points. The index attempted to break 7,050 points three times but failed and declined again.

In the worst-case scenario, a drop to 6,400 points should be considered. Maintaining a wait-and-see approach is recommended over premature trading, and it is time to anticipate a full market recovery starting from the October earnings season.