Semiconductor, AI, and Secondary Battery Market Outlook

Today the market showed a pattern of strength in the morning and weakness in the afternoon, and as institutions turned to selling during the session, the index turned negative. Samsung Electronics turned positive and showed relatively strong momentum, but SK Hynix reversed to a decline and weighed on the index.

Guest Kim Jang-yeol analyzed Hynix's decline by saying that while there are concerns over the intraday turn to negative, it appears that profit-taking selling is emerging after yesterday's gains. He also assessed it as more of a technical correction than an overall deterioration in fundamentals, and mentioned the market situation with no particular momentum.

In tandem with the decline in U.S. overnight futures, the domestic stock market showed weakness, and news of Israel's bombing of Gaza pushed oil prices up to 93.7 dollars, which was cited as a factor in the market decline.

However, CEO Lee Kwon-hee said, "The time when oil prices surged was around 11 to 12 o'clock. From my perspective, saying it fell because of that seems like a bit of a deliberate stretch," expressing skepticism about whether the rise in oil prices was the main cause of the market decline.

In the morning, AI optimism driven by the success of Meta's AI service 'Muse' led the market atmosphere, but in the afternoon it showed a pattern of strength in the morning and weakness in the afternoon.

Samsung Electronics' rise is interpreted as a process of closing the valuation gap that had widened with Hynix. Guest Kim Jang-yeol viewed that if the overall total market growth potential of the HBM market is maintained, the stock price could rise again through valuation comparisons in the future.

Meanwhile, regarding which of Samsung Electronics or SK Hynix would fall more sharply when there are no macro issues, he stated that one should watch the relative stock price trends of the two companies.

The assessment emerged that this could serve as an opportunity for LG Electronics to build a new growth story based on its HVAC technology.

An analysis emerged that MLCC loading volume is increasing as Nvidia's data center models become more advanced. The guest mentioned that for the Vera Rubin class, MLCC loading volume reaches about 600,000 units, and for the Grace Blackwell model, it is understood to be about 430,000 units.

He also presented the outlook that if the speed of optical modules for data center networks improves to 1.6T, MLCC demand could increase by 3 to 5 times compared to now.

CEO Lee Kwon-hee explained that the revitalization of local AI chip development in China is becoming a factor promoting demand for package substrates as well as MLCCs.

In the case of MLCCs, orders from some companies continue, and order volume has been secured through the second quarter of next year, and the view was presented that the market is sensing moves by companies to respond preemptively.

The guest said, "With growth doubling at 37 times and growth at 15% at a bit over 10 times, which would you buy? It's your own inclination," suggesting that the choice can differ depending on the investor's individual disposition. He indicated a view that Samsung Electro-Mechanics could be an investment based on high growth potential, while LG Electronics could be based on current market target prices and other considerations.

In the case of LG Electronics, the average target price from securities firms is 250,000 to 280,000 won, leaving room for upside from the current price, but Samsung Electro-Mechanics has previously recorded stock prices in the 2 million and 3 million won range, so the comparison suggested that an investment approach considering future growth potential is possible.

TLB has a CPU socket share of over 30%, the highest among domestic substrate companies.

The guest explained, "Their socket share is probably over 30%. The highest in our country. That's why they're going," mentioning the characteristic of a high socket share.

The PER based on this year's estimated earnings is assessed at around 20 times. However, since target prices vary between 57,000 won and 90,000 won, investors should check reports before investing.

According to some reports' estimates for next year, revenue is expected to decline compared with this year, but operating profit is expected to more than double.

The analysis is that if the guidance that the operating margin will rise from the previous 3.7% to 8% next year is maintained, the current stock price trend can be seen as reasonable.

Increased air cargo transport demand, changes in exchange rates and oil prices, and the completion of the merger process with Asiana Airlines appear to be having a combined effect.

Meta's unveiled AI agent 'Muse' helps users with shopping.

It is a service in which an AI agent supports the browsing and purchasing process that users previously had to do manually on existing platforms such as Amazon.

Amazon decided to block the activities of third-party AI agents, raising the possibility of a rights dispute between sales platforms and AI agents.

On the other hand, Shopify is pursuing agentic checkout in cooperation with Meta, showing that strategic choices differ by company.

The fundamentals confirmed at the end of July are still solid, and the trend in AI-related stocks such as Nvidia, Broadcom, Astra, and Muse is positive.

If the macro environment improves ahead of the U.S.-China summit, stock prices are expected to react more elastically.

Macro uncertainties remain, such as the current 5% level of government bond yields and rising oil prices, but the market has revived and is in a phase of looking upward.

Institutional investors need to respond quickly to flexible stocks in the market, and if not, a strategy of waiting around the index or large sectors is necessary.

The KOSPI market is showing a typical pattern of digesting the accumulated supply zone over time, unlike past V-shaped rebounds.

Ahead of Chuseok, individual investors' selling supply has appeared since last week, and trading value has also decreased compared with April to June.

Liquidity is insufficient to lift ultra-large caps, so supply is moving toward small and mid-cap stocks.

The guest mentioned next year's KOSPI operating profit trend as the driving force supporting 7,000 points, and judged that given the current operating profit trajectory, 7,000 points is a sufficiently explainable price level.

Foreign long funds (long-term investment funds) have internal rules that restrict investment adjustments or new purchases depending on volatility levels.

The V-KOSPI indicator, which represents Korea's volatility, exceeded 90 at its peak in June, but is now in the mid-40s.

Compared with last year when V-KOSPI moved around 20, it is still high, and if this volatility indicator stabilizes, there is a possibility that institutions will resume new purchases.

From an interest perspective, a 5% rate means it takes 20 years to recover the principal, which corresponds to a company's PER of 20 times.

In a high-interest-rate environment, controversy arises over whether even a growing company can justify a high multiple.

Unlike when liquidity is abundant, in a high-interest-rate environment, companies that generate profits are distinguished from those that do not.

In a situation where companies face cost burdens, industries that can pass on cost increases to consumer prices are likely to maintain revenue and operating profit growth.

AI services are changing the way data is processed and utilized beyond the existing text search method.

The analysis is that the emergence of this service can be a turning point allowing consumers to experience life changes through AI.

AI-related investment continues without interruption, and major companies are proving this through orders and earnings.

Recently, investors have been paying attention to volume (Q) growth, and as we move toward the second half of 2026, the possibility of benefits for the materials, components, and equipment sector from volume growth is being discussed.

There is an opinion that as supply-demand distortions caused by single-stock leveraged ETFs disappear, the gap that had widened between KOSPI and KOSDAQ companies is being closed.

When volume increases, materials and component companies benefit, and equipment tends to see revenue rise when investment proceeds. Test equipment and socket companies are expected to draw attention in the second half and next year.

According to a New York Times report, the IPO of SB Energy, a data center development company invested in by Nvidia, was postponed from September to mid-to-late October.

SB Energy recorded $140 million in revenue and $3 billion in losses in the first half, and most of its 20-year backlog will occur after 2028, so financing is urgent.

Some have linked the news of the IPO postponement to the market's bad atmosphere.

Agrico is also slowing the pace of its IPO related to distributed power supply.

The uncertainty of these data center-related companies served as a pretext for the decline in semiconductor stocks at a time when growing AI data center power demand and rising demand for small modular reactors (SMRs) are connected.

As news spread of IPO delays by related companies such as SB Energy, Holtec, and Agrico, in which Nvidia invested, some articles in the market cited this as a reason for the stock decline.

According to market consensus, HBM prices next year would need to rise by 40-50% or more, up to 100%, compared with this year to secure higher margins than conventional DRAM.

When one additional HBM is produced, a trade-off ratio occurs in which 3-4 fewer conventional DRAM units are produced. This is a structure in which production of high-spec products accelerates the reduction in supply of conventional DRAM.

In the past HBM3, the ratio was 1 to 3, but as the industry moves to HBM3E, this ratio is expected to grow to around 1 to 4. Due to these production constraints, conventional DRAM supply-demand tends to worsen.

It was mentioned that depending on the earnings announcement results, the stock price trend could break upward or become trapped in a box again.

In particular, the key point to watch is whether the gross profit margin (GPM) will meet the consensus of 86%, up from 84.9% last quarter. It was mentioned that the margin is unusually high, and whether it can be sustained is most important.

Market pessimists continue to question the sustainability of margins, while those with a positive view see economic growth, including AI investment, absorbing high interest rates and driving the market.

It was mentioned that in this earnings announcement, how the status of long-term supply contracts with strategic customers is updated is very important on the upside, and talk related to HBM growth rates will also be important.

Intekplus is a vision test equipment company with customers including Intel, Samsung, and Taiwanese back-end process companies. It expects 60 billion won in operating profit in the fourth quarter, which is expected to account for most of its annual profit, and including undisclosed order backlog, it is expected to approach 200 billion won.

This means a turnaround from having recorded losses through the third quarter.

Institutional investors are playing a returns game through sector rotation while Samsung Electronics and SK Hynix show box-range trends, and a strategy using flexible small and mid-cap stocks is being mentioned.

Right before the Chuseok holiday, the market is showing a typical pre-holiday pattern, characterized by intraday fluctuations rather than a substantial large decline.

In a market just before a holiday when buying interest thins out, stocks tend to drift under the influence of gravity.

It is impossible to predict major macro indicators, and it is important to grasp the big picture rather than trying to time trades around temporary volatility.

Recently, Samsung Electronics' stock rose more than 5%, entering a range where realizing trading gains is more advantageous than dividend income.

In particular, high-net-worth individuals have a greater incentive to sell before the ex-dividend date and realize gains due to the burden of dividend income tax and comprehensive income tax.

This selling pressure acted as a factor pulling down the index, and in particular, foreign investors were observed buying up to 400 billion won and then sharply reducing spot holdings.

A peculiar phenomenon is appearing in which stock prices do not fall or even rise despite continuous selling by individual investors.

This reflects a situation in which the order book is thin due to market supply and demand, so stock prices can move easily with small amounts.

Market participants point out that in this situation, buying can easily push prices up, but selling can make them collapse even more easily.

Foreign investors appear to be accumulating stocks they have decided to buy, separate from the stocks individual investors are selling.

News that a Wall Street investor visited Wonik IPS headquarters was mentioned in the market. The purpose of the visit was said to be scouting investment targets.

A simple visit does not guarantee a direct stock price rise, but this is cited as an example showing foreign investors' interest in materials, components, and equipment companies.

Recently, in semiconductor export data, prices fell but volume (Q) increased, maintaining total export value, and confidence in the growth of the materials, components, and equipment sector was mentioned. Also, although issues regarding AI acceleration and deceleration emerged, the opinion was presented that AI is ultimately in a phase where it must keep pressing the accelerator.

Currently, KOSDAQ has severe concentration of supply and demand among stocks, so focusing on individual stocks such as materials, components, and equipment or robots is more effective than investing in the entire index.

Even as interest rates peak and decline, the response from the bio sector is minimal, and for investment sentiment to improve, major bio companies such as Alteogen need to show tangible results.

Investors tend to find bio sector investment difficult and hesitate compared with semiconductors and AI sectors where earnings are confirmed.

Concerns were raised that if comments about easing regulations on Chinese secondary battery companies come out of the U.S.-China summit, it could hurt the stock prices of domestic secondary battery companies.

However, the analysis concludes that the impact of the summit will not be significant.

Given the structural trend in which data centers and secondary batteries must grow together, the opinion is that a 'buy and hold' strategy is effective if there are no particular negative factors.

The speaker analyzed that if the average purchase price is in the mid-300,000 won range, the current loss range would be large.

The opinion was presented that if a technical rebound occurs, one could consider reducing the position by 20-30% for mental recovery, and consider selling a small amount in consideration of the possibility of a margin call.

Even though major negative factors such as government bond yields breaking above 5%, oil at $100, and rate hikes were exposed, the U.S. market did not fall significantly.

Sector rotation occurred in the order of power equipment, semiconductors, CPUs, and hyperscalers, and tech stocks showed strength centered on AI momentum.

The possibility was raised that the movement in U.S. tech stocks last week may have been due to futures options expiration, but it is now analyzed that sector rotation is occurring within AI momentum.

KOSPI continues to face resistance near the 7,000 line, but the speaker presented the opinion of interpreting this as an accumulation zone.

In particular, the possibility was raised that foreign investors, considering the part related to Samsung Electronics' dividend, could use the additional buying opportunity on the 28th to add volume and create a high closing price.

The seller just before the holiday was individual investors, and given past cases, stock prices tended to rise a lot after holidays, so a similar trend can be expected this time.

Over the past three days, individual selling volume in the KOSPI market reached about 10 trillion won.

The fact that the securities lending balance has decreased significantly, leaving almost no downward betting volume, was mentioned as a positive signal.

Advice was given that it is necessary to prepare scenarios for stock price trends around Samsung Electronics' preliminary earnings announcement in early October.

There is also a negative view of choosing a rights offering method in the listing process, and it is pointed out that this could have an adverse effect on existing shareholders.

Concerns were also raised that in a falling market, ADRs could be used as a channel for short selling and increase volatility ahead of the Korean market.

This is because when the U.S. market is open, sharp decline volatility can occur first, and the Korean market may have to respond later.

During a rate hike period, bank stocks are originally considered the biggest beneficiaries, but recently U.S. and domestic bank stocks have plunged despite rate hike issues.

Regarding this phenomenon, the speaker cited concerns over bank earnings along with the fact that bank stocks are no longer cheap as major factors. Bank of America's stock tripled from its COVID-19 low, and domestic bank stocks also rose a lot last year.

Therefore, the opinion was presented that even if holding bank stocks, one should reduce the position to less than half of what was previously thought and lower the investment threshold, considering efficiency.