According to a survey by The Chosun Business of research heads at eight major Korean securities firms (KB, Shinhan, Mirae Asset, Daishin, Samsung, Kiwoom, Meritz, Hana), most respondents believe the recent pullback in semiconductor stocks is due to short-term fund flows rather than a signal of fundamental deterioration; as long as US hyperscaler data center operators continue to expand capital expenditure, the semiconductor-led KOSPI rally could persist in the near term.
Eight Securities Firm Research Heads: Recent Semiconductor Stock Pullback Comes from Profit-Taking, Reduced Market Congestion, and Leverage Fund Flows
According to the Chosun Business survey, Hana Securities research head Hwang Seung-taek said: "The recent pullback in semiconductor stocks is not so much due to damage to fundamentals, but rather the simultaneous occurrence of profit-taking after a sharp rise, reduced market congestion, and fund flows related to leverage products."
Shinhan Securities research head Kim Hak-kyun pointed out that Meta's use of idle AI computing power means a change in how existing data centers are utilized, not a halt in semiconductor purchases. "This does not signify a fundamental shift in the semiconductor industry." The earnings reports and capital expenditure plans of hyperscaler data center operators remain the most important indicators.
Eight Securities Firm Analysts' Core Views on the AI Investment Cycle
According to the Chosun Business survey of research heads at eight securities firms, the main views of each respondent on the AI investment cycle and the outlook for semiconductor stocks are as follows:
Daishin Yang Jae-hwan: Concerns over the surge in AI capital expenditure over the past three years are a "recurring test question"; competitive investment will continue to prevent sunk costs from occurring. Maximizing AI model performance over the next 12 months can still sustain investment expansion.
Mirae Asset Park Yeon-joo: Earnings expectations for semiconductor companies are being revised up continuously. Korean semiconductor valuations are attractive compared to global peers. Long-term supply contracts enhance earnings stability. Global AI investment is still in its early stages.
Samsung Yoon Seok-mo: The AI semiconductor rally is still ongoing and will continue to play a leading role in the second half of the year.
Kiwoom Lee Jong-hyung: Semiconductors account for over 90% of this year's KOSPI operating profit growth. This is driven by structural AI demand, unlike the old supply-driven cycle.
KB Kim Dong-won: Prolonged interest rate hikes are the biggest downside risk, but AI investment is difficult to stop easily. The supply shortage will persist until 2028.
Shinhan Kim Hak-kyun: No major structural change has yet been confirmed that would alter the view on the semiconductor industry.
Interest Rate Hikes Are the Biggest Variable; AI Investment Will Continue Until 2028
According to the survey, KB Securities research head Kim Dong-won said: "If interest rate hikes continue for a long time, the biggest risk is that they could lead to a reduction in AI investment." Mirae Asset research head Park Yeon-joo also pointed to inflation and interest rates as key risk factors; as rates rise, corporate financing costs increase, reducing the feasibility of large-scale capital expenditure.
However, Kim Hak-kyun added: "AI investment cannot be easily stopped, so the supply shortage situation will persist until 2028." Park Yeon-joo also predicted: "Since AI investment is critical, the impact of macro variables will further diminish."
Analysts also suggested that, given the cyclical nature of the semiconductor industry, re-evaluation based on new data should be conducted every three to six months, rather than blind long-term optimism.
Frequently Asked Questions
How do research heads at Korea's eight major securities firms assess the recent pullback in KOSPI semiconductor stocks?
According to the Chosun Business survey, most research heads believe the recent pullback is due to short-term fund flows (including profit-taking, reduced market congestion, and leverage fund flows), rather than a signal of fundamental deterioration; as long as hyperscaler data center operators continue to increase capital expenditure, the semiconductor-led rally could persist in the near term.
How much has the semiconductor stock contributed to KOSPI's profit growth this year?
According to Kiwoom Securities research head Lee Jong-hyung, the semiconductor industry has contributed over 90% of this year's KOSPI operating profit growth; he also noted that current semiconductor demand is driven by structural AI demand, unlike the past supply-driven memory cycle.
What is the timeframe analysts give for the AI investment cycle and supply shortage?
According to KB Securities research head Kim Dong-won, AI investment is difficult to stop easily, and the supply shortage will persist until 2028; several respondents believe global AI investment is still in its early stages, and no structural changes have yet emerged that could alter the overall view on semiconductors.
