Chip stocks diverge: Samsung surges, SK hynix dips

The stock prices of South Korea’s leading chipmaker Samsung Electronics and crosstown rival SK hynix have recently been moving along different trajectories, pricing in contrasting outlooks for their business prospects.

On Friday, Samsung Electronics closed at 67,100 won ($48.15), reaching its highest price this year. Meanwhile, SK hynix ended the day at 269,000 won, down more than 10 percent from its 52-week high of 306,500 won on July 11.

The recent shift marks a reversal from trends seen in the first half of 2024, when SK hynix led a strong rally while Samsung Electronics lagged behind.

Up to July 11, SK hynix shares surged over 50 percent year-to-date, more than doubling Samsung Electronics’ 25 percent gain during the same period.

SK hynix’s strong position in the booming high-bandwidth memory market helped fuel its rally, driven by surging demand from artificial intelligence applications, while Samsung Electronics was seen to face more diversified challenges across its semiconductor segments.

Yet in recent days, Samsung Electronics has seen a rebound in its stock performance, buoyed by renewed investor optimism -- particularly from foreign investors.

Offshore investors have net purchased 1.87 trillion won worth of Samsung Electronics shares so far this month, pushing its level of foreign ownership to 50.08 percent as of Friday. It was the first time the figure surpassed the 50 percent threshold since April 24.

The foreign buying rush for Samsung Electronics was fueled by the Supreme Court's acquittal of its chief Lee Jae-yong on Thursday, which ended years of legal charges associated with him. Between Thursday and Friday, offshore investors net bought Samsung Electronics shares amounting to 922 billion won.

"The Supreme Court’s final ruling on Chair Lee Jae-yong added to expectations that Samsung Electronics will gain renewed momentum in driving forward its business initiatives,” Shinhan Securities analyst Kang Jin Hyeok said.

On the other hand, SK hynix shares declined Thursday after Goldman Sachs downgraded the chipmaker’s rating to “neutral” from “buy” for the first time in over three years, citing concerns that advancing competitors could pressure its market position.

Following the report, SK hynix' share price fell as much as 8.8 percent during the day, wiping out approximately 19.3 trillion won in market capitalization.

Foreign investors net sold SK hynix shares worth 301 billion won in July, ending a two-month buying spree from May to June. They offloaded SK hynix shares valued at 700 billion won over Thursday and Friday alone.