The market capitalization of SK hynix (000660.KS), which once surpassed that of Samsung Electronics (005930.KS) on a common-share basis, has shrunk back to about 87% of Samsung's level. As global semiconductor stocks began a full-fledged correction this month, SK hynix's shares reacted more sensitively than Samsung Electronics'. Analysts said the earnings results from global big tech and semiconductor companies scheduled to be released this week will be a watershed for the shares of "Samsung Electronics and SK hynix."
According to the Korea Exchange on the 27th, SK hynix's market capitalization stood at 1,294.2675 trillion won that day, or 87.1% of Samsung Electronics' 1,484.9548 trillion won. The market cap ratio relative to Samsung Electronics, which was 100.7% on the 22nd of last month, retreated to around 90% early this month and then fell to 85.6% on the 22nd of this month. SK hynix held the No. 1 spot in KOSPI market capitalization for only two days (June 22-23).
Shares of Samsung Electronics and SK hynix fell 29.1% and 37.7%, respectively, from their record highs on the 25th of last month through the 27th. Over the same period, the KOSPI index dropped 24.4%, with SK hynix's share decline far larger than Samsung Electronics'.
The financial investment industry says this correction once again proved that SK hynix is a stock that reacts more sensitively to global semiconductor industry outlook and earnings. The interpretation appears to be that SK hynix derives 100% of its revenue from semiconductors, while Samsung Electronics' semiconductor share stood at 61% of first-quarter revenue, making it relatively less sensitive in a semiconductor correction.
SK hynix's market cap ratio relative to Samsung Electronics also shows a high correlation with the U.S. Philadelphia Semiconductor Index. The U.S. Philadelphia Semiconductor Index fell about 19% from its peak, based on the closing price on the 22nd of last month, through the 24th of this month. If the index reverses upward going forward, it can be estimated that SK hynix's share gains would be steeper than Samsung Electronics'. On the 27th as well, Samsung Electronics closed up 1.8% at 254,000 won, while SK hynix ended trading up 3.24% at 1,816,000 won.
Analysts expect the major big tech and semiconductor earnings releases this week to serve as upward momentum for semiconductor stock prices, which have been on a downtrend. SK hynix will report its second-quarter earnings on the 29th, and Samsung Electronics will hold a conference call on its second-quarter results on the 30th. More important than the size of operating profit are the long-term agreements (LTA) with U.S. big tech and the outlook for high-bandwidth memory (HBM) shipments.
Based on Korean time, major big tech companies including Meta and Microsoft on the 30th and Amazon and Apple on the 31st will also release earnings. Lee Kyoung-min, a researcher at Daishin Securities, said, "Whether artificial intelligence (AI) capital expenditure will expand, along with mentions of customer demand through big tech earnings conference calls, will be the biggest watershed for share movements," adding, "There is a high possibility that semiconductor stock prices will quickly find their footing starting from the end of this month." Kim Jae-seung, a researcher at Hyundai Motor Securities, stressed, "We need to watch whether the earnings releases from companies investing in AI infrastructure can lower concerns about AI monetization and investment sustainability, recover share prices, and rebound investment sentiment for semiconductors."
Starting on the 31st, a measure raising the basic deposit for single-stock-related products (from 10 million won in cash or substitute securities to 30 million won in cash) will also take effect. As single-stock leverage products have had some negative impact on the domestic stock market's supply-demand dynamics and investment sentiment, expectations are emerging that SK hynix's share price volatility will ease somewhat once the strengthened measure takes effect. Among the 16 single-stock-related products listed on the domestic stock market, the one with the largest net assets is the "KODEX SK hynix Single Stock Leverage," which tracks SK hynix's daily return at 2x. This product's net assets stand at 3.4033 trillion won, about 1.7 times larger than the "KODEX Samsung Electronics Single Stock Leverage" (2.0404 trillion won), which ranks second in net assets.
