Samsung Electronics and SK hynix tumbled about 5% to 6% in early trading, dropping to 238,000 won and 1.509 million won respectively, as concerns spread over expanded supply from a Chinese memory maker's plan to mass-produce next-generation DRAM chips. Selling pressure has intensified, centered on large-cap semiconductor stocks.
Samsung Electronics (005930.KS) was trading at 238,000 won on the morning of the 13th, down 4.99% from the previous session, according to the Korea Exchange. SK hynix (000660.KS) fell 5.98% to 1.509 million won. Samsung Electronics slipped as low as 237,000 won during the session, while SK hynix fell to 1.507 million won. Both stocks had also plunged the previous day, down 4.4% and 4.5% respectively.
Other semiconductor-related stocks also weakened across the board. SK Square (402340.KS), the largest shareholder of SK hynix, was trading at 907,500 won, down 7.77%, while Samsung Electro-Mechanics (009150.KS) fell 5.99% to 1.398 million won. The simultaneous plunge in large-cap chip stocks dragged the KOSPI down 3.10% at the open to 6,186.08, falling below the 6,200 level.
The declines were attributed to a sharp drop in semiconductor shares on U.S. markets overnight. The Philadelphia Semiconductor Index fell 2.67% in New York trading on the 12th. Micron fell 3.9% and SanDisk dropped 6.0%. The losses came after China's Changxin Memory Technologies (CXMT) said it plans to begin mass production this year of next-generation DRAM chips with reduced cell sizes for improved performance, raising concerns about expanded supply in the global memory market.
Foreign selling added to the downward pressure. In early trading, foreign investors sold a net 948.8 billion won worth of shares on the main board, while individual and institutional investors bought a net 493 billion won and 383.8 billion won respectively.
Still, some analysts say it remains to be seen whether supply concerns stemming from China will translate into an actual deterioration in earnings. CXMT has not yet succeeded in mass production of its next-generation memory, and yields, performance and customer certification remain unverified. Earnings announcements from ASML and TSMC scheduled this week are also cited as variables that could ease uncertainty over the semiconductor industry outlook.
