K-Transformer Purchase War: Shortage Will Go This Far | Lee Jae-chan, Hana Securities Myeongdong Financial Center Deputy

Summary

Lee Jae-chan, Deputy at Hana Securities, sees the current market pullback as a noise-filled adjustment and reiterates that the fundamental direction for Korean semiconductors remains intact. He argues Samsung Electronics and SK hynix are deeply undervalued compared to TSMC and that SK hynix's planned Nasdaq ADR listing will unlock passive inflows and re-rate the stock. The transformer/power equipment sector, his second core AI theme, is poised to benefit from structural shortages and guidance upgrades, with Hyundai Electric, LS Electric, and Hyosung Heavy as top picks.

• Korean semiconductors remain a core asset despite recent sell-offs driven by high valuations and leveraged ETF positioning.
• Samsung Electronics and SK hynix trade at extreme P/E discounts versus TSMC, with Samsung's foundry turning profitable for the first time.
• SK hynix's upcoming Nasdaq ADR listing is a clear positive catalyst, expected to attract large passive flows and re-rate the stock.
• Power equipment and transformers are the second most important AI theme, supported by structural supply shortages and tariff exemptions.
• Hyundai Electric just dramatically raised its guidance, repeating a pattern that previously led to a sharp stock re-rating.
• LS Electric is the market's favorite transformer play due to its smart grid technology and a validating contract from Blue Energy.
• Hyosung Heavy offers a cheap entry into the transformer shortage theme, with ultra-high-voltage products and long-term agreements.
• MLCC is mentioned as a possible third-tier AI play but no single stock is called with conviction.