In the afternoon of August 2, fears of a recession originating from the United States swept over major Asian semiconductor stocks. The Philadelphia Semiconductor Index, composed of U.S. semiconductor companies, plummeted by more than 7% the previous day, triggering the decline. Concerns about whether companies can continue to invest heavily in artificial intelligence (AI) during an economic slowdown also acted as a negative factor.
On this day, the decline of Samsung Electronics and SK Hynix, the two leading semiconductor companies in the Korean stock market, was particularly noticeable. Samsung Electronics, the top company by market capitalization on the KOSPI, closed at 79,600 won, down more than 4% from the previous day, returning to the “70,000 won range” for the first time in about a month. Individual investors bought more than 500 billion won ($approximately $370 million) worth of shares to defend the stock, but it was not enough to counter the strong selling pressure from foreign and institutional investors.
SK Hynix closed at 173,200 won, down 10.4% from the previous day. This is the largest drop since August 18, 2011 (-12.24%). Its market capitalization evaporated by 14.63 trillion won in just one day. Foreign investors, who had been driving up the stock price, changed their stance and sold nearly 2 trillion won worth of shares over the past ten days. SK Hynix had been riding the AI boom, with its stock price surpassing 240,000 won last month, but it has since fallen by more than 28%. According to Naver Pay, the average purchase price of SK Hynix shares by individual investors is about 166,000 won.
On this day, domestic semiconductor-related stocks, including semiconductor equipment company Hanmi Semiconductor, also showed a collective decline, with Hanmi Semiconductor falling by 9.35%.
In Japan and Taiwan, semiconductor-related stocks were also heavily sold. Tokyo Electron, a semiconductor equipment company, fell by 12%, while Lasertec and Advantest also showed declines of around 8%. Hosoi Shuji of Daiwa Securities said, “Concerns about the slowdown of the U.S. economy, coupled with fears that the strong yen will reduce the earnings of export companies, led to a panic selling situation.” Taiwan’s TSMC, the world’s largest foundry (semiconductor contract manufacturing) company, also fell by 5.9%, weighing down the Taiwanese stock market.
Huh Jae-hwan, a researcher at Eugene Investment & Securities, said, “Concerns about a U.S. economic slowdown are a negative factor for semiconductor and other export stocks to the U.S., and the possibility of an export slowdown in the second half of the year cannot be ruled out,” adding, “It will take time to confirm that there are no problems with the economy or corporate earnings.”
On this day, the KOSPI recorded its largest drop in nearly four years due to concerns about a U.S. economic slowdown. According to the Korea Exchange, the KOSPI closed at 2676.19, down 101.49 points (3.65%) from the previous trading day. The KOSPI’s decline rate based on the closing price was the largest since August 20, 2020 (3.66%), and the drop in points was the largest in four years and five months since March 19, 2020 (133.56 points).
The market capitalization evaporated by 78.6431 trillion won in just one day. Institutions and foreigners led the decline in the KOSPI. Institutions net sold 774.3 billion won, and foreigners net sold 843.2 billion won. Individuals net bought 1.6138 trillion won.
Concerns about a U.S. economic slowdown, a 7% plunge in U.S. Nvidia, the unwinding of yen carry trades, and the re-emergence of the Middle East war froze investor sentiment.
The KOSPI200 Volatility Index (VKOSPI), known as the “fear index,” was 21.77, the highest in about one year and nine months since October 31, 2022 (21.97).
As the market continues to react to these economic uncertainties, the future developments in the semiconductor industry and broader stock markets remain closely watched by investors and analysts alike.
