Korean Chip Makers Benefit From Output Setback in China
The South Korean semiconductor industry is expected to take advantage of the Wuhan coronavirus outbreak and the resultant production setback in China. Foreign investors are continuing to buy stocks of South Korean semiconductor companies this month.
Korea Exchange (KRX) announced on Feb. 10 that the KRX Semiconductor Index rose 0.27 percent to 2,713.56 points that day and rose 4.4 percent for the first 10 days of this month. The index is currently approaching its 52-week high, 2,836.42, recorded on Jan. 22. The index includes SK Hynix, Wonik IPS, GemVax, DB HiTek and EO Technics.
“The virus was predicted to adversely affect investment in the industry and lead to lower stock prices of Samsung Electronics and SK Hynix,” Hana Financial Investment explained, adding, “However, unlike the predictions, the respective prices rose 7.1 percent and 6.1 percent last week with the Chinese government’s economic stimulus program to counter the virus having a positive impact on the industry.”
It also said that positive signs in the industry are more than offsetting concerns over the virus. “For example, the server DRAM price, which dropped during the recent U.S.-China trade disputes, hit the bottom of US$100 and is rebounding fast with inventory accumulation resumed by clients.”
This month, foreign investors bought more than 345.42 billion won of Samsung Electronics shares and more than 67.05 billion won of SK Hynix shares to post the largest and fifth-largest net buy, respectively. This has to do with predictions that semiconductor production and supply by Chinese companies will remain hampered for a while.