Samsung Electronics, SK Hynix: Why Stock Prices Crashed — Now the Real Reason Has Become Clear / Can They Surge If Shareholder Returns Reach 100 Trillion Won?

Summary

Research Center Head Kim Jang-yeol analyzes the steep decline in Korean equities, arguing the crash was driven by non-fundamental supply-demand distortions rather than deterioration in AI demand. He sees a confirmed bottom in KOSPI and KOSDAQ, highlights robust HDD demand as evidence the AI capex cycle is intact, and makes a strong valuation case for Samsung Electronics and SK Hynix, which he believes are deeply undervalued relative to Micron due to domestic liquidity issues and are poised for a significant rebound once distortions normalize.

• KOSPI fell from 9200-9300 to 6200 on supply-demand shocks (double ETFs, ADR liquidity) rather than fundamental weakness, while KOSDAQ bounced over 30% from its low.
• Bottom confirmed for both indices, supported by easing macro fears (strong big-tech bond demand, lower CDS premiums, restrained rate-hike expectations) and reduced double-ETF trading.
• AI capex is not peaking: Western Digital's CEO disclosed long-term orders through 2029 and expanding demand from hyperscalers and neo-cloud, supporting HDD names like WDC and STX.
• Korean memory stocks exhibit a 40ppt performance gap vs Micron over three months, entirely attributable to domestic supply-demand distortions, not fundamentals.
• At 3.4x forward P/E for 40% earnings growth, Samsung and SK Hynix are historically cheap; Micron at 6x is within normal range, suggesting at least 20% upside in Korean memory.
• SK Hynix is expected to announce a 100 trillion won shareholder return package (including 40 trillion won buyback) in September, a necessary catalyst to support the stock.
• The shareholder-return gap narrative is exaggerated: Micron's 100% of excess cash return is not directly comparable to Samsung and Hynix's 50% of free cash flow returns.
• Money flow eventually needs to rotate back from big tech to memory because stable, affordable memory is a prerequisite for hyperscalers to leverage AI profitably.