Samsung Electronics, SK Hynix Slide More Than 4% on Fed Rate Fears, China Competition
Summary
- Samsung Electronics and SK Hynix fell more than 4% as the possibility of a U.S. benchmark rate increase coincided with weakness in semiconductor shares on Wall Street.
- Investor sentiment weakened as a surge in CXMT's DRAM revenue and plans to expand production capacity fueled expectations for a bigger share of the global DRAM market.
- Losses in South Korean chip stocks widened as YMTC's expansion in production capacity and market share in the NAND flash market combined with valuation pressure from tighter U.S. monetary policy.
Forecast Trend Report by Period
Samsung Electronics and SK Hynix fell more than 4% early on Aug. 31 as semiconductor stocks on Wall Street weakened amid renewed concern over a possible U.S. interest-rate increase.
As of 9:09 a.m., Samsung Electronics was trading at 246,500 won, down 4.09% from the previous session. SK Hynix fell 4.42% to 1.58 million won.
Pressure on South Korean chip stocks came in part from concerns over U.S. rates. On Aug. 28, the Philadelphia Semiconductor Index dropped 3.47%, souring sentiment across the sector.
The decline followed Jackson Hole remarks by Federal Reserve Chair Kevin Warsh, who stressed the need for a policy response to contain inflation. After the speech, market-implied odds of a Fed rate increase in September jumped to 59% from about 35%. Selling spread through rate-sensitive technology shares, particularly chipmakers, as investors braced for the possibility that rates could stay higher than expected or rise further.
Investor sentiment was also weighed down by the rapid growth of Chinese memory makers. Chinese DRAM producer CXMT said on Aug. 28 that first-half revenue totaled 150.3 billion yuan, up 874% from 15.4 billion yuan a year earlier and more than double its full-year revenue for last year. Net profit for the same period swung to 77.6 billion yuan from a loss a year earlier.
The company has also flagged further capacity expansion. CXMT, which currently operates three DRAM plants in China, plans to add three more production facilities. If the expansion proceeds as planned, its share of the global DRAM market could rise from 8% last year to 11% in 2028 and 15% by 2030.
Chinese companies are also gaining ground in the NAND flash market. As Yangtze Memory Technologies Co., or YMTC, expands output and market share, competition with established memory makers including Samsung Electronics and SK Hynix is intensifying.
South Korean semiconductor stocks extended losses early in the session as investors weighed valuation pressure tied to the prospect of tighter U.S. monetary policy against concerns over Chinese rivals gaining market share.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.