SK Hynix Ranks 1st in KOSPI Market Cap: Semiconductor Supercycle vs. Peak-out Debate

SK Hynix has made history in the Korean stock market by surpassing Samsung Electronics to claim the No. 1 spot in KOSPI market capitalization. Amid the ongoing AI semiconductor rally driven by Nvidia, a fierce debate is unfolding in the financial sector between expectations of a 'semiconductor supercycle' and fears of a 'peak-out'.

Background of SK Hynix's Rise to No. 1 and Foreign Buying

SK Hynix's strength is undoubtedly due to its monopolistic position in the High Bandwidth Memory (HBM) market. Foreign investors continue their net buying spree, anticipating explosive demand growth fueled by the expanding AI industry. On the other hand, Samsung Electronics, the former market cap leader, has slipped to second place due to delayed earnings improvements in its foundry sector. The KOSPI's slight rebound at the 7,475 level after a short-term plunge is also interpreted as the result of bargain hunting centered on large tech stocks like SK Hynix, whose valuation appeal has been highlighted.

The Reality of the Semiconductor Peak-out Debate

Despite SK Hynix breaking historical highs, a heated debate is intensifying among retail investors. This is because some brokerage firms have released 'memory semiconductor peak-out reports'. They warn that a memory oversupply could occur starting in the first half of next year, and that positive outlooks are already overly priced into the current stock value. However, optimists counter that AI server infrastructure build-out is just beginning, and unless demand from global Big Tech companies like Nvidia falters, the rally will continue until 2027.

Key FAQ

• Q: What is the future outlook for SK Hynix and Samsung Electronics' stock prices?
  A: In the short term, the valuation appeal of SK Hynix, which holds the HBM leadership, may stand out more. However, if Samsung Electronics succeeds in turning around its foundry earnings and accelerating HBM supply in the second half, it could seek a strong stock rebound.
• Q: With peak-out fears, should I sell my semiconductor stocks now?
  A: While AI semiconductor demand remains solid, a range-bound market may occur due to fatigue from short-term surges. A split buy/sell approach is advantageous while monitoring macroeconomic indicators like the US CPI and the Fed's interest rate cut path.