Fed Holds Rate Again as 'September Hike' Signal Rattles Markets

*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an "artificial intelligence (AI)-based personalized news recommendation and summarization service" developed with support from the Korea Press Foundation. It selects and provides six customized news items by reader type.

1. "No Magic Wand to Tame Prices"…Warsh Leaves the 'Fight With Inflation' to Markets

- Key Summary: The U.S. Federal Reserve (Fed) held its benchmark interest rate at 3.50-3.75% on the 29th. Fed Chair Kevin Warsh said there had been a "fierce debate" over the need for a rate hike, but drew a line against raising rates, saying there is no magic wand to solve inflation in a matter of days. In this decision, three members—Lorie Logan, Beth Hammack, and Neel Kashkari—cast dissenting votes calling for a rate hike, and the market raised the probability of a rate hike at the September meeting from 55.8% to 65.1%. Immediately after the freeze announcement, bonds, stocks, and the dollar declined together while international gold prices rebounded, with financial markets swinging sharply.

2. Unstoppable CXMT Fallout…Shaking SK hynix and Micron Shares

- Key Summary: China's DRAM manufacturer Changxin Memory Technologies (CXMT) surged 466% on its first trading day on the Chinese stock market on the 27th, recording a market capitalization of 3.3 trillion yuan (about 701 trillion won). In the aftermath, the U.S. Nasdaq 100 index fell about 10% from its June 2 peak, and the KOSPI, which has a high weighting of Samsung Electronics and SK hynix, slid about 40% over the month. With news added that Apple is testing CXMT chips, assessments have emerged that China is entering the mainstream of the global semiconductor market. Meanwhile, the U.K.'s Financial Times (FT) analyzed that SK hynix, having plummeted 50% over the past five weeks, is undervalued with a price-to-earnings ratio (PER) of less than 3 times its projected earnings two years out.

3. With Disclosure Shackles Loosening, Will hynix Play the Shareholder Return Card?

- Key Summary: It has been confirmed that SK hynix cannot announce specific shareholder return measures until the 4th of next month due to prospectus delivery obligations arising from its U.S. American Depositary Receipt (ADR) listing. In a recent conference call, it offered only a general answer that it is "reviewing various methods" regarding shareholder returns, and its share price plunged to 1.322 million won, down 5.64% from the previous day. As a result, the share price fell 50.11% over the past month, cut in half, and 8 of 16 domestic securities firms lowered their target prices. Amid observations that shareholder return demands will intensify further from the 5th of next month when legal restrictions are lifted, the average target price stood at 3.22 million won.

4. Taiwan's AI Supply Chain Grows Evenly…Korea Has Only 'Samsung-hynix'

- Key Summary: Among the top 100 technology companies in Korea, Japan, and Taiwan by market capitalization, Taiwanese and Japanese firms numbered 44 and 43 respectively, while Korean firms numbered only 13. Taiwan saw companies across the AI supply chain—including TSMC, MediaTek, Delta, and Foxconn—grow evenly, and Japan built a thick foundation of materials, parts, and equipment firms. In contrast, Korea showed severe concentration, with just two companies, Samsung Electronics and SK hynix, accounting for 86% of the market capitalization of the country's top 100 companies. Taiwan's economic weekly Business Today forecast that Taiwan's strengths will stand out in chiplets and advanced packaging, whose importance will grow over the next five years.

5. Samsung "Q3 HBM4 Revenue to Triple…Memory Shortage to Worsen Further"

- Key Summary: Samsung Electronics posted consolidated second-quarter revenue of 171.4995 trillion won and operating profit of 89.4924 trillion won, setting a new record for the largest earnings among global tech companies, surpassing Nvidia ($52.5 billion) and Apple ($50.9 billion). The semiconductor (DS) division was responsible for 99.7% of total profit with revenue of 127.5 trillion won, while the device experience (DX) division, including mobile and TV, recorded its first operating loss of 800 billion won due to the impact of chipflation (a surge in semiconductor prices). Kim Jae-jun, head of strategic marketing at Samsung Electronics' memory business division, said, "Q3 HBM4 revenue will increase more than threefold from the previous quarter," adding, "The memory supply shortage next year will be more severe than this year." Samsung's DS division signed long-term supply agreements (LTAs) with five big tech firms including Amazon and Meta, and decided to allocate up to 70% of its production capacity to them.

6.Forced Liquidations Hit Three-Week High…'Debt Investing' Emergency Amid Two-Day Plunge

- Key Summary: As the domestic stock market plunged with an unprecedented two consecutive days of circuit breakers, forced liquidations of individual investors are pouring out. According to the Korea Financial Investment Association, the amount of forced liquidation in consignment trading as of the 29th was 61.1 billion won, the highest since July 9 (142.2 billion won). On the same day, the outstanding balance of credit-based loans stood at 32.9950 trillion won and consignment trading receivables at 1.2 trillion won, both remaining at high levels. The securities industry is concerned that an increase in forced sale volumes could trigger a chain of additional collateral shortfalls and forced liquidations.