KB Securities: Korean Chip Stocks Pullback May Reflect Investors' Doubts About Earnings Sustainability

Odaily News: KB Securities analysts E.T. Lee and D.E. Lee stated that although the AI boom has kept semiconductor companies' profit expectations elevated, the pullback in Korean chip stocks may partly reflect investors' doubts about earnings sustainability. Samsung Electronics and SK Hynix shares fell for a fifth consecutive trading day.

The two analysts wrote in a report, "Investors still seem to view semiconductors as a cyclical industry and remain skeptical about the sector's ability to consistently generate profits." They noted that while supply bottlenecks can drive profit surges during boom periods, the eventual easing of supply bottlenecks could lead to excess inventory and overinvestment. They added that similar patterns also appeared after the pandemic in industries such as diagnostic test kits, masks, toilet paper, and container shipping. (Jinshi)