Samsung and SK Hynix rally as foreign interest returns to South Korea

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Samsung and SK Hynix rally

Highlights

Samsung Electronics gained 6.68% to 255,500 won.
SK Hynix advanced 5.54% to 1,504,000 won.
Temasek is reportedly considering direct investments in both chipmakers.
Foreign investors returned to Korean equities.

Samsung Electronics rose 6.68% to 255,500 won, while SK Hynix climbed 5.54% to 1,504,000 won, according to the latest market data. The gains followed an Asia Business Daily report that Temasek plans to invest directly through its internal investment team and is considering when to enter, Bloomberg writes.

Chip stocks recover from July rout

The rally marks another step back from the heavy losses suffered by South Korean semiconductor stocks in July, when investors questioned whether the pace of spending on artificial intelligence infrastructure could be sustained. Leveraged positions amplified the decline, leaving both companies trading at sharply reduced valuations.

That reset has begun attracting buyers. Samsung and SK Hynix were recently valued at about 4.2 and 3.6 times forward earnings, respectively, compared with more than 21 times for the Philadelphia Semiconductor Index, according to data cited in the original report.

The prospect of improved shareholder distributions is providing another reason to revisit the sector. SK Hynix said last week that it plans to disclose details of its shareholder-return policy during the third quarter. Samsung is also expected to increase distributions, with analysts watching for additional buybacks and dividends. The renewed focus on returning cash to investors has helped support sentiment after the selloff.

Foreign buying has reinforced the recovery. Global funds purchased more than 2 trillion won, or roughly $1.4 billion, of Kospi shares by mid-Wednesday, while retail investors were net sellers. The broader Kospi rose as much as 5.1% during the session.

Foreign capital tests the memory-chip rebound

The significance of the Temasek report extends beyond a potential investment in two companies. A commitment by a large long-term institutional investor would provide a fresh test of whether foreign capital now views July's semiconductor correction as an entry point rather than the beginning of a deeper retreat.

Memory-chip producers remain central to the AI hardware supply chain, but investors are increasingly balancing that demand against the risk that rapid infrastructure spending eventually slows. That tension contributed heavily to July's repricing.

For Samsung and SK Hynix, the combination of lower valuations, prospective shareholder payouts, and renewed institutional interest offers a stronger foundation for recovery. Temasek has yet to confirm an investment, however, leaving the latest rally partly dependent on whether reported interest ultimately turns into actual capital.

We have previously highlighted that Samsung and SK Hynix plan massive AI chip investments in South Korea.

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