Semiconductor stocks fell for five weeks on AI investment concerns, but a $950 billion cooperation was announced May 24 at the San Francisco AI Summit. The collaboration involves Korean companies and global big tech firms in AI and semiconductor development, countering worries about AI capital expenditure reduction and demand slowdown. The KOSPI closed at 6690.62, down 1.91% from the May 16 close, with sidecar circuit breakers triggered for 10 consecutive trading days despite Alphabet reaffirming increased capital expenditure guidance that confirmed semiconductor demand.
KOSPI Records 1.91% Decline Amid 10-Day Circuit Breaker Streak
According to SK Securities, the KOSPI closed last week at 6690.62, down 1.91% from the May 16 closing price. The index decline was limited, but market internal volatility was extreme with sidecar circuit breakers activated for 10 consecutive trading days. Alphabet confirmed semiconductor demand by raising capital expenditure guidance again during its earnings announcement, but market caution did not significantly decrease.
Samsung Electronics and SK Hynix perpetual futures in the virtual asset market traded 1-2% higher than domestic stock market closing prices on May 24.
Korean Companies Announce $950 Billion AI Cooperation at San Francisco Summit
At the San Francisco AI Summit, a total of $950 billion in AI and semiconductor cooperation between Korean companies and global big tech was announced. Cho Jun-ki, researcher at SK Securities, stated that while a verification process exists for the announced face value and the binding force and recognition timing of individual contracts, counterarguments were presented to suspicion points such as AI capital expenditure peak-out and demand reduction due to efficiency improvements. He said this would serve to brake recent unfriendly narratives.
Market Sentiment Indicators Show Investor Fund Outflows
The market's fundamental strength remains weak. Foreigners net bought on the KOSPI for two consecutive weeks, slowing strong selling momentum, but the VKOSPI stood at 78.7p on Friday, still at a high level. KOSPI credit balance decreased from around 30 trillion won at the peak to 26 trillion won, and KOSDAQ fell from 11 trillion won to 7 trillion won. Customer deposits also decreased from 140 trillion won to 104 trillion won.
The semiconductor sector extended its five-week decline, plunging 5.72% on May 24. After domestic market close, KOSPI 200 night futures fell an additional 2.8%.
Cho stated that since this is a large-scale demand material coming after five consecutive weeks of decline, the May 24 plunge, and additional KOSPI 200 night futures decline, the early market price flow on the 27th is very important.
Samsung Electronics and SK Hynix Schedule Earnings Reports This Week
Major events that will determine market direction are concentrated this week. Domestically, SK Hynix confirmed earnings and conference call are scheduled for May 29, and Samsung Electronics for May 30. In the United States, Microsoft and Meta will announce earnings at dawn on May 30 Korean time, and Amazon and Apple at dawn on May 31. Whether big tech capital expenditure expansion continues and the resulting free cash flow burden are key points to watch.
Cho diagnosed that this week monetary policy and earnings are compressed into 2-3 days, requiring observation of reaction functions rather than directionality.
FAQ
What cooperation was announced at the San Francisco AI Summit on May 24?
A total of $950 billion in AI and semiconductor cooperation between Korean companies and global big tech firms was announced at the San Francisco AI Summit on May 24.
How did the KOSPI perform last week?
The KOSPI closed at 6690.62 last week, down 1.91% from the May 16 closing price, with sidecar circuit breakers triggered for 10 consecutive trading days.
When are Samsung Electronics and SK Hynix scheduled to report earnings?
SK Hynix confirmed earnings and conference call are scheduled for May 29, and Samsung Electronics for May 30.
