Semiconductor stocks attempt rebound as CXMT concerns subside, but late-session selling erases gains
Market volatility widens due to foreign net selling and suspected margin calls
Key Market Developments
① "CXMT concerns overblown": Semiconductor rebound attempts
Early in the session, the KOSPI saw a brief rebound led by Samsung Electronics and SK hynix as anxieties surrounding China’s CXMT began to wane.
Analysts noted that the recent news regarding CXMT appears to be a technical disclosure rather than a commercialization breakthrough, with the company’s actual manufacturing technology, yields, and production capacity yet to be proven.
Given current memory supply constraints, experts believe it is unlikely that even a significant ramp-up in production by CXMT would trigger an immediate supply glut.
Furthermore, since the reported technology focuses on DDR5 rather than HBM, the consensus is that while long-term competition warrants caution, it poses no immediate threat to South Korean chipmakers.
② Volatility returns: Oil prices and ASML weigh on sentiment
Semiconductor stocks faced late-day volatility after reports surfaced that Houthi rebels had attacked Aramco’s headquarters, driving a spike in global oil prices.
Although the target was an office facility rather than oil production infrastructure, the market reacted sensitively to the symbolic nature of the attack on Aramco.
Market sentiment soured further in the final hour after ASML released earnings that beat market expectations, only for its shares to fall in after-hours trading, triggering a fresh wave of selling in local chip stocks.
Samsung Electronics and SK hynix ultimately gave back their earlier gains as volatility surged. While Samsung Electronics saw some positive sentiment regarding potential dividend increases following news of Chairman Lee Jae-yong receiving an inheritance of approximately 11 million shares, the overall bearish mood in the semiconductor sector remained insurmountable.
③ Selling pressure spikes near breakeven; supply-demand instability continues
The KOSPI attempted to move toward the breakeven point during the session, but selling pressure intensified sharply as the index approached that level.
An uptick in limit-sell orders during the closing auction suggests that the recent market slide has begun to trigger forced liquidations (margin calls) of retail credit positions.
With investors selling into any rally to meet margin requirements, the index has struggled to sustain any recovery. Foreign investors, while reducing the scale of their net selling, remained net sellers, keeping a lid on any potential rebound.
Supply, Demand, and Sector Performance
Foreign investors remained net sellers in KOSPI’s electric/electronics, financial, and machinery sectors, while net buying in logistics, IT services, chemicals, pharmaceuticals, and telecommunications. In the KOSDAQ, foreign selling was concentrated in the semiconductor sector.
Institutional investors were net buyers of electric/electronics, transport equipment, logistics, and chemicals.
Shipbuilding, pipe/fitting, and steel sectors saw gains following U.S. commentary regarding investment in Alaska, while automobiles, secondary batteries, and entertainment stocks also showed strength.
Semiconductor equipment and materials stocks generally traded lower, impacted by weakness in U.S. equipment peers, portfolio rebalancing, and reports of delayed HBM4 equipment adoption by SK hynix.
Market Commentary
Concerns regarding CXMT have moderated compared to the previous day. As production capacity and yields remain unverified, and the technology involves DDR5 rather than HBM, it is difficult to view this as an immediate factor that would alter the earnings outlook for domestic semiconductor firms.
Recent comments from Federal Reserve officials have also eased some pressure on the interest rate front. Statements from New York Fed President John Williams and Governor Christopher Waller suggest that the scope for further rate hikes may be limited.
Currently, the market’s greatest burden is supply and demand. Amid continued foreign selling, the recent sharp decline has triggered potential forced liquidations, making the index highly reactive to even minor news. A recurring pattern has emerged where selling pressure spikes whenever the index attempts to rebound as investors seek to cut losses.
Tonight's U.S. CPI release is expected to be a critical short-term variable. If core inflation exceeds expectations, volatility in interest rates could surge again due to fears of energy price pass-through. Conversely, results in line with or below expectations could serve as a catalyst to stabilize recent supply-demand imbalances.
The recent decline has been rapid without a clear deterioration in corporate earnings or economic outlook. While volatility is expected to persist until supply and demand stabilize, the market is in a phase where technical rebounds may be attempted repeatedly. Investors should monitor the performance of established market leaders, large-cap stocks that have been oversold, and companies tied to policy and investment themes.
Data: Sijwang-man’s Stock Story (t.me/shmstory)
YouTube: Sijwang-man TV www.youtube.com/@blueoak1004
This article is a reconstructed summary of a post from Sijwang-man’s Stock Story Telegram channel, published with the author's consent. All content may contain errors and does not constitute investment advice; it should not be used as the basis for any trading decisions. Under no circumstances shall the contents of this post be used as legal evidence.
