Sluggish Shares
Concerns are growing among individual investors with shares in Samsung Electronics and SK Hynix. Although they purchased stocks of the two companies in anticipation of a semiconductor super cycle, their stock prices do not rise as high as the investors expected.
According to the Korea Exchange on July 11, Samsung Electronics' stock price hit 79,400 won on July 9. It fell 1.97 percent during the past one-month period and 4.34 percent from the beginning of 2021. The same goes for the stock price of SK Hynix. Shares fell 2.85 percent during the same period and 5.16 percent in 2021. All of them are lower than the KOSPI index (a drop of 0.20 percent during the same period and a drop of 11.99 percent in 2021).
On the other hand, the non-memory industry is showing clearly different moves. The stock price of DB HiTek rose 11.4 percent in the past one month period. DB HiTek is the world's 10th-largest foundry company producing 8-inch products. In addition, the stock prices of Tesna and Nepes, which are non-memory supply chain companies in Korea, gained 15.29 percent and 12.11 percent, respectively, in the same period.
Stock prices of foreign semiconductor companies showed a similar move. SOXX, a semiconductor ETF that follows the Philadelphia Semiconductor Index, rose 17.67 percent in 2021. The top contributor to the yield of this ETF is GPU company Nvidia, whose shares jumped 52.90 percent in 2021. Its recent monthly growth rate reached 15.07 percent. On the other hand, Micron Technology, which has a relatively low profile in ETFs, has seen its stock price fall by 0.68 percent in the same period. Its growth rate is 6.33 percent, but it did not perform well compared to other stocks.
The memory industry, which is dominated by Korean companies, is characterized by wide amplitude between the upswing and downswing of semiconductor price cycles. The stock prices of Samsung Electronics and SK Hynix are weighed down by concerns that a memory market boom sparked off by COVID-19 is in its final stage and memory prices may fall soon, analysts say. In the same vein, Wall Street analysts recently recommended investors to sell Micron stocks. On the other hand, many analysts say that the non-memory business has relatively stable conditions and non-memory chips’ importance is on the uptick during the Fourth Industrial Revolution.
Outlooks for the semiconductor shares are mixed. Korean stock analysts are showing both optimism and pessimism over Samsung Electronics and SK Hynix stocks.