Samsung Electronics, SK Hynix Shares Plunge: The Real Cause Is 'Supply-Demand'…100 Trillion Won Shareholder Return Plan Was Already Anticipated

He judged that concerns about fundamentals have virtually no substance, and emphasized that the market's excessive reaction stems from supply-demand imbalances.

Kim said the KOSPI has confirmed its previous low as a bottom. The main basis for this bottom confirmation was that concerns about fundamentals have largely eased. This is interpreted as a positive signal that overall market anxiety is subsiding.

This suggests the demand base for semiconductors and related industries remains solid.

After measures were introduced on 2x ETFs, trading volume fell sharply, helping ease market volatility. Alphabet's recent 25 billion dollar corporate bond issuance drew 100 billion dollars in demand, demonstrating strong demand for big tech companies.

U.S. employment data released on October 7 was not especially strong, but this instead acted as a 'good signal.' Kim forecast that while the data would not directly lead to rate cuts, it could prompt the Fed to slow the pace of rate hikes.

Kim explained that the recent sharp rise in KOSDAQ was due to a base effect from its much steeper prior decline than the KOSPI, along with rising priority in terms of rotational supply-demand flows.

Although Western Digital's shares fell after its earnings release, rival Seagate's shares unusually rose. This suggests the market is valuing the two companies differently, and shows that weak results at one company do not necessarily drag down the entire sector.

Kim flatly denied the 'AI peak' theory (the view that AI technology has reached its peak) circulating in some quarters. He explained that big tech companies' AI investment is not decreasing, so there is no peak in AI technology itself. He added, however, that if financial conditions deteriorate, weak links in the AI supply chain or overinvesting companies could face difficulties.

He stressed that while there is no doubt about AI's growth potential, domestic memory chip stock performance is being influenced by other factors. He said this gap will become a key topic going forward.

Kim said the precondition for capital flowing back into the memory chip industry is that big tech companies must be able to secure the memory they need for AI investment at stable, predictable prices. He explained that the pace of this capital's return ultimately depends on the will and circumstances of big tech companies, which have large amounts of money and influence. This means the recovery of the memory chip market depends heavily on the strategic decisions of major buyers, not just on technological progress.

Contrary to the common view that companies in the same sector move in similar patterns, he stressed that each company's shares have taken their own path. This suggests that individual company characteristics and market valuations are being reflected in share prices differently.

If the decline in memory consensus had been the main cause, the three companies' share movements should not have differed much, yet a gap of as much as 40 percentage points actually emerged. Kim pointed out that even though they are all memory makers, they moved as if they belonged to entirely different sectors.

Although he had repeatedly emphasized supply-demand issues before, he expressed regret that many still view shareholder return policy as the core cause. He explained that the roughly 40 percentage point gap with Micron is also due to supply-demand imbalances, and reiterated that this issue has a very large impact on domestic chip stock prices.

He said this also carries significant implications for how the PER of domestic chip stocks should be valued.

Kim posed a fundamental question about what conditions must be met for memory chip share prices to keep rising steadily over time. He suggested this goes beyond short-term issues or supply-demand dynamics and requires deeper consideration of industry structure and corporate strategy. He emphasized that the answer to this question will determine the long-term share price direction of domestic chipmakers.

Kim stressed that this cancellation plan is an important part of SK Hynix's shareholder return policy, and noted that while the market has high expectations, execution of the plan is what matters.

This means the recently surfaced shareholder return issue was not new information but something already known to the market. His analysis is therefore that the plan is unlikely to be a strong enough catalyst to trigger a surge in the share price.

Kim revisited this past commitment, stressing that shareholder return policy should be approached as part of a consistent management philosophy. He added that by comparing whether past promises were kept with the current shareholder return plan, one can assess the company's credibility and its long-term efforts to enhance shareholder value.

He therefore said it is inappropriate to simply compare the shareholder return ratios of Micron with Samsung Electronics or SK Hynix, and stressed that analysis must account for each company's cash flow and financial structure.

He said that when understanding each company's shareholder return policy, one must clearly recognize that the cash flow standards used differ, and warned against comparing them on numbers alone.