Samsung Electronics shares, which were scraping the bottom until early this year, have settled in the 90,000-won range and are eyeing an all-time high. The stock has risen 34% since September, driving the KOSPI's 12.5% gain over the period. Although shares fell 1.17% the previous day as the U.S.-China trade dispute rekindled over the weekend, the performance is seen as resilient considering the Nasdaq plunged 3.5%.
Except for the previous day, when bargain hunting flowed in, retail investors have been on a selling spree for five straight sessions. Since September, they have been net sellers on 21 of 26 sessions through the previous day. This is seen as driven by profit-taking and a build-up of distrust toward the so-called "national stock."
However, foreign investors, who are scooping up most of the Samsung Electronics shares that individuals are offloading, see it differently. They view the current semiconductor cycle not as a simple recovery but as a structural shift.
Even Shawn Kim, a Morgan Stanley analyst known as the "grim reaper of semiconductors" for his unsparing critiques of Korea's chip market, dramatically raised his target price for Samsung Electronics to 111,000 won, saying, "In the fourth quarter, semiconductor prices will rise more than expected, and a stronger recovery will continue through 2026."
So what makes this semiconductor supercycle different from the past? Cha Yong-ho, an analyst at LS Securities, pointed to the emergence of "neo-cloud" firms as the reason. He said new cloud providers such as CoreWeave and Nebius are creating demand of a different order as they ramp up AI server investment.
Existing big tech firms already have basic inventories of memory for cloud servers and purchase with that in mind, but neo-cloud firms are startups that are generating powerful new demand that includes not only volumes for actual use but also inventory build-up.
On top of that, companies such as Google and Amazon are developing their own application-specific integrated circuit (ASIC) chips instead of relying on Nvidia, diversifying the customer base for high bandwidth memory (HBM). This is reducing dependence on Nvidia while enhancing stability across the HBM industry.
The outlook for earnings is also positive. Samsung Electronics is expected to post its highest operating profit in eight years next year. Catalysts include a prolonged price increase due to a shortage of DRAM supply, a recovery in the foundry (contract chip manufacturing) business, and diversification of Nvidia HBM4 supply.
Meanwhile, it is positive that major countries, including the United States, have begun supplying liquidity through measures such as fiscal spending and monetary easing. In particular, in the United States, there is an assessment that a moderate level of inflation can help reduce excessive liability burdens, lowering the likelihood of a shift in monetary policy.
Uncertainty remains, of course. The U.S.-China power struggle is a variable, as President Trump said he would impose an additional 100% tariff on China starting on the 1st of next month in response to China's rare earth export controls.
However, experts believe short-term variables are not enough to alter the structural upward trend. As for the U.S.-China standoff, they said the moves are aimed at boosting bargaining power ahead of a U.S.-China summit set to be held in Gyeongju at the end of this month.
Seo Jeong-hun, an analyst at Samsung Securities, said, "An expansion in short-term volatility does not in itself damage the market's mid- to long-term growth trajectory," adding, "It is clearly true that earnings visibility for corporations related to AI semiconductors remains high."