The Direction of Korean Semiconductor Stocks Depends on 'This'. What Needs to Be Proved? | Dr. Kim Hyojin, Shinhan Securities

Summary

Dr. Kim Hyo-jin of Shinhan Securities analyzes whether the recent KOSPI sell-off was the real bottom, using custom metrics like the upward retracement ratio and historical export correlation. He concludes that the index has likely found a floor. He then examines the valuation re-rating potential for Korean semiconductors, especially SK Hynix, arguing that the company must prove earnings stability through cycles, as TSMC has, to escape the value trap.

• KOSPI retraced 52% of its prior rally, consistent with historical norms, suggesting the bottom is in.
• The KOSPI fell to the level of current export values, which has acted as a strong support in the past.
• Export data remains solid, reducing the risk of further sharp declines.
• Foreign investors treat Korea as a trading market until the index can demonstrate structural re-rating.
• SK Hynix is striving to achieve TSMC-like earnings stability through HBM technology, customization, and long-term contracts.
• The key for Korean chipmakers is to prove they can defend profitability during the next down cycle.
• If successful, Korean semiconductor stocks could see significant multiple expansion.