As the domestic stock market takes a break for the Liberation Day holiday, attention turns to the stock prices of Samsung Electronics and SK Hynix ahead of trading on August 18.
With U.S. memory semiconductor stocks continuing to perform well, there is optimism that domestic semiconductor stocks may also start strong on August 18. However, given the recent rapid rise in both the domestic market and memory stocks, there are concerns about potential profit-taking that could reverse early gains.
U.S. Memory Stocks Surge; SK Hynix ADR Rises
The most notable development is the rise of SK Hynix's American Depositary Receipt (ADR), which is listed on the Nasdaq under the ticker SKHY.
On August 14, SK Hynix ADR closed at $166.33, up 0.40% from the previous day. Notably, investor sentiment towards memory stocks has improved rapidly.
Among U.S. memory stocks, Micron and SanDisk have shown significant gains. Micron rose by over 2% on August 14, while SanDisk continued its upward trend. This optimism was fueled by SanDisk's presentation of long-term revenue and profitability goals at an investor event, which has led to a more favorable outlook for the memory market.
SanDisk's stock surged following its long-term growth forecast, and there are assessments that the overall memory sector in the U.S. is attempting to enter a bull market again.
Domestic Stocks Already Soaring; Potential for Further Gains on August 18
On August 14, the domestic stock market was also led by semiconductor stocks.The KOSPI index closed up 2.41% at 6,977.34, nearing the 7,000 mark. Foreign investment flowed into semiconductor stocks, resulting in gains for both Samsung Electronics and SK Hynix. SK Hynix rose 3.26% to 1,645,000 won, while Samsung Electronics increased by 2.43% to 274,500 won.
Notably, since SK Hynix listed its ADR on the Nasdaq in July, domestic investors have been able to trade directly in the U.S. market. The structure allows one domestic share to be traded as ten ADRs.
Therefore, while the domestic market is closed, the movement of SK Hynix ADR in the U.S. could influence the domestic stock price on August 18.
However, caution is advised when directly applying the ADR price to domestic stock prices, as the trading hours differ, and factors such as exchange rates and liquidity in the U.S. market can affect valuations. In fact, SK Hynix ADR often trades at a significant premium compared to its domestic counterpart.
Samsung's Focus on Semiconductor Market Rather Than ADR Expectations
Samsung Electronics' situation is somewhat different.Following SK Hynix's U.S. listing, there were speculations that Samsung might pursue an ADR in the U.S., but the company officially denied this. In its earnings report last month, Samsung stated that there is currently no strong need for an ADR for new capital raising and that it is not considering issuing one at this time.
Thus, on August 18, Samsung is likely to be more directly influenced by the U.S. semiconductor sector, memory prices, foreign investment flows, and the won-dollar exchange rate.
The challenge is that the U.S. stock market has not moved in the same direction as semiconductor stocks overall.
On August 14, the U.S. stock market experienced slight declines due to weak consumer indicators and geopolitical tensions in the Middle East. The S&P 500 fell by 0.17%, the Nasdaq by 0.28%, and the Dow Jones by 0.20%. Notably, Applied Materials dropped over 5% despite strong earnings, as expectations were high, and some semiconductor stocks, including Broadcom, also showed weakness.
In contrast, investor sentiment towards memory stocks remained relatively strong. Micron continued its upward trend, and SK Hynix ADR closed in the $166 range.
Ultimately, the key focus for the domestic market on August 18 will be whether the relative strength of memory semiconductors continues, rather than the overall U.S. market direction.
Current trends suggest that both Samsung Electronics and SK Hynix are likely to start strong on August 18.
Particularly, since SK Hynix's ADR has been trading during the domestic market closure, there is a real-time price signal for investors to consider. If SK Hynix ADR and other memory stocks continue to rise in the U.S., there is a possibility of renewed buying interest in the domestic market.
However, the extent of the gains may be limited. The domestic market has risen for five consecutive trading days up to August 14, with the KOSPI increasing by 11.5% over the week. If profit-taking occurs due to the rapid short-term rise, semiconductor stocks may also give back some of their early gains.
Moreover, as the U.S. market may continue to move until early morning on August 18, unexpected variables could arise when domestic investors begin trading that morning.
For now, the most realistic outlook is that while there is a high likelihood of a strong start, investors should monitor market conditions rather than chase after buying opportunities.
If the strength of SK Hynix's ADR continues, it could signal positive developments for the domestic stock. Samsung Electronics could also see gains if expectations for improved memory market conditions and foreign investment persist.
Ultimately, on August 18, investors will focus on whether the KOSPI can break through the 7,000 mark and how much Samsung Electronics and SK Hynix can reflect the positive momentum from the U.S. memory market.
* This article has been translated by AI.
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