Samsung Electronics and SK Hynix fell in Seoul on Tuesday despite an overnight rebound in US semiconductor stocks.
SK Hynix dropped 3.6% to 1,231,000 won, while Samsung lost 1.5% to 214,500 won by 10:30 am local time. The KOSPI declined 3.2% to 5,587.27.
The losses contrasted with Monday’s 1.61% rise in the Philadelphia Semiconductor Index, which ended an eight-session losing streak. Micron gained nearly 3% and SanDisk climbed 5.5%.
The divergence suggests investors remain reluctant to rebuild positions in Korean memory producers despite signs of bargain hunting on Wall Street.
Foreign selling keeps Seoul under pressure
Overseas investors sold 605.8 billion won ($456 million) of KOSPI shares by mid-morning Tuesday. Institutions sold another 470.7 billion won, overwhelming 832.1 billion won of retail buying.
The renewed selling followed a volatile Monday. Foreign funds briefly returned as buyers during the morning, but finished the session as small net sellers even as the KOSPI gained 1.76%.
They had withdrawn more than 11 trillion won from Korean shares the previous week, amplifying a sell-off concentrated in technology stocks.
Samsung and SK Hynix carry enormous weight in the benchmark, so overseas selling in the pair can pull down the wider market even when domestic investors buy the dip.
Kim Dae-joon of Korea Investment & Securities warned that foreign funds were withdrawing liquidity from technology and financial shares.
He also identified a 0.6 rolling correlation between the KOSPI and the US semiconductor benchmark.
Solidigm adds another problem for SK Hynix
The US chip rebound may itself be fragile. Nvidia and Micron recovered on Monday, but investors have yet to resolve whether heavily indebted AI infrastructure companies can sustain their expansion plans.
“The market is happy to cover shorts and unwind defensive trades,” Chris Weston, Pepperstone’s head of research, said in a note cited by Reuters on Tuesday. He distinguished closing bearish bets from rebuilding substantial exposure to AI.
SK Hynix also faces a separate problem. South Korea’s financial regulator said Monday that a possible US flotation of its Solidigm storage subsidiary could violate restrictions designed to protect minority shareholders.
The potential listing, previously reported to value Solidigm at up to $150 billion, has raised concerns that investors in the Korean parent could lose some economic exposure to a valuable business.
What could bring foreign buyers back?
Demand for high-bandwidth memory used in AI servers remains substantial, but investors are questioning whether current profit margins can survive higher financing costs and competition from China’s CXMT.
Shinhan Financial Investment researcher Noh Dong-gil argued that share prices were discounting the durability of future profits, rather than weakening earnings forecasts.
His assessment highlights the concerns that strong memory demand today offers limited comfort if customers postpone tomorrow’s data-centre projects.
Kiwoom Securities analyst Han Ji-young sees scope for a rebound after Korea’s outsized losses, although he expects volatility.
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