Kospi Rebounds as SK Hynix (000660) Initiates Stock Buyback

OpenAI adjusts its $30B funding target to $20B, securing $11B at a $1.25T valuation ahead of its IPO. DeepSeek launches Super-Agent, an AI coding tool, to compete with Anthropic's Claude Code. Samsung plans to increase AI spending by 60% to challenge SK Hynix, the leader in AI memory, after missing profit estimates and delaying shareholder rewards.

South Korea's President Lee Jae Myung proposed a 21.3 trillion won ($16 billion) budget for AI and semiconductor projects by 2027, nearly double the current year's funding. The plan includes 4.7 trillion won for AI development and aims to create a domestically developed AI model. The total budget proposal is 821 trillion won, a 12.8% increase from the current year. Samsung Electronics and SK hynix, major players in the memory-chip industry, are expected to benefit from this investment.

SK hynix is expected to achieve a record operating profit of 104 trillion won in Q4, driven by AI memory demand and higher DRAM/NAND prices. KB Securities maintains a 'Buy' rating with a 3.5 million won target price, citing undervaluation and strong earnings growth. The company plans a 100 trillion won shareholder return program, including treasury-share cancellations and cash dividends.

Samsung Electronics and SK Hynix have signed long-term supply agreements (LTAs) for memory chips with multiple clients, driven by AI demand. Samsung has 10 signed contracts and is negotiating with 10 more, aiming for 60-70% of production capacity under LTAs by 2030. SK Hynix has secured contracts with 14 clients, including major cloud providers, and has sold out production capacity through 2029.

South Korea's exports may hit $1 trillion this month, driven by semiconductors. However, Intel's weak guidance and cash flow concerns have raised doubts about AI and chip demand, impacting Big Tech stocks. Samsung and SK hynix are currently benefiting from the semiconductor cycle, but a downturn could significantly affect Korea's economy.

Samsung Electronics and SK Hynix led a 5.7-fold surge in corporate treasury share acquisitions in South Korea this year, totaling 101.92 trillion won. SK Hynix acquired 60 trillion won, while Samsung acquired 22 trillion won. Analysts expect these moves to positively impact future stock valuations.