KOSPI Briefly Reclaims 7,000 as Broker Ceilings Cluster Near 7,500

Samsung Electronics (005930.KS) and SK hynix (000660.KS) are nearing early completion of their share buyback programs, potentially finishing by mid-October. Samsung has bought 74.69% of its target, spending 10.31 trillion won, while SK hynix has purchased 58.79% of its target, spending 24.39 trillion won. The early completion may increase volatility in the Korean stock market, as the buybacks have supported the KOSPI index.

HanmiGlobal will manage the construction of SK Hynix's $4 billion HBM packaging plant in Indiana, USA. The facility, SK Hynix's first AI memory production base in the U.S., is set for completion in 2028 with mass production starting in 2029. HanmiGlobal will oversee coordination, process, and cost management for the project.

The strengthening Korean won is reducing third-quarter earnings estimates for major electronics firms like Samsung Electronics and SK hynix, as their dollar-denominated revenues shrink when converted to won. Brokerages have cut profit forecasts, with Samsung's consensus operating profit dropping 9% and SK hynix's falling 6.7% in recent weeks. Both companies have warned of significant profit reductions due to exchange rate fluctuations.

Samsung Electronics plans to double production of its HBM4 and HBM4E memory chips next year, expanding glass carrier volume 2.5-fold. The company expects HBM4 revenue to exceed $10 billion by year-end, with HBM4 products accounting for 80% of shipments in 2025. Higher yields and increased demand for AI-related memory are driving the expansion, which may impact general-purpose DRAM supply and pricing.

Samsung's HBM4 yield has improved to around 80%, up from 60% earlier. The company expects HBM4 revenue to triple in Q3 and account for over 60% of total HBM revenue in the second half. Samsung projects significant earnings growth, with operating profit estimates at 375.7 trillion won for 2023, up from 43.6 trillion won last year. The company is expanding HBM production capacity and improving its market share in the HBM sector.

The Export-Import Bank of Korea's Overseas Economic Research Institute forecasts the global semiconductor market to exceed $1.6 trillion this year, driven by AI infrastructure investments. Samsung Electronics and SK Hynix are expected to benefit, with memory semiconductor demand surging. KB Securities predicts Samsung's operating profit to rise 587% in the second half of 2023, reaching record highs.