Semiconductor stocks surpass those of batteries

Semiconductor stocks are leading the rise in the stock market in May, with Samsung Electronics (SEC)' share price re-entering the 70,000 won range. The KOSPI IPO market, which seemed to have lost its vitality, is also recovering.

According to the Korea Exchange on Sunday, the “KRX Semiconductor TOP 15” index on Friday went up by 9.54% month-on-month. This is an index of 15 chips, materials, and equipment makers, including SEC, SK hynix, and DB Hitech. On the other hand, the “KRX Secondary Battery K-New Deal Index,” which consists of 10 secondary battery-related stocks such as LG Energy Solutions and Samsung SDI, fell 3.06% during the same period. This is the opposite trend from last month when the secondary battery stock demonstrated strong performance.

Entering May, semiconductor stocks have continued to record new highs for 52 weeks. SEC closed at 70,300 won on Friday, up 2.18% from the previous day. It is the first time in 14 months since March 29 last year (70,200 won) that SEC's share price went beyond 70,000 won based on the closing price. SK hynix closed at 109,200 won, up 5.51 percent as well. These company stocks traded at 70,400 won and 110,500 won intra-day, respectively, achieving 52-week highs.

Despite the “chips war” waged between the U.S. and China, expectations that overall semiconductor performance will improve in the second half of the year are driving up stock prices. Production cuts by the three memory makers (SEC, SK hynix, and Micron) and recovery in demand are acting as trending factors for the semiconductor market.

Foreigners are aggressively making investments in domestic semiconductor stocks. Foreign investors bought SEC and SK hynix shares for 1.9754 trillion won and 1.1315 trillion won, respectively, in May. This accounts for roughly 84% of foreigners' net purchases (3.6871 trillion won) in the stock market during the same period.


syeon@donga.com