[Good Morning Market] Semiconductor Stocks Plunge During Holiday... KOSPI Faces Test at 6,000 Mark

U.S. Stocks End Lower on July 17
Rising U.S.-Iran Geopolitical Tensions
Focus on Alphabet and Other Earnings This Week

Following the release of free artificial intelligence (AI) models in China, which has triggered fears of a 'second DeepSick' moment, and with speculation intensifying that the semiconductor industry has reached its peak, there are now forecasts that the KOSPI could also fall below the 6,000 mark.

On July 17 (local time) at the New York Stock Exchange, the Dow Jones Industrial Average closed at 52,146.42, down 0.77% from the previous session. The S&P 500 index ended at 7,457.69, having dropped 1.01%, while the Nasdaq Composite closed 1.4% lower at 25,520.24.

As the KOSPI plunged sharply, breaking below the 6,800 level during the session, employees at the Hana Bank headquarters dealing room in Jung-gu, Seoul, were monitoring the stock market and exchange rates on the 16th. On that day, the KOSPI opened at 6,960.50, down 323.91 points (4.45%) from the previous close, while the KOSDAQ index opened at 813.32, down 16.11 points (1.94%). July 14, 2026 Photo by Cho Yongjun

The semiconductor sector was the main factor behind the sharp decline. The Philadelphia Semiconductor Index fell 4.3% over the holiday period. Although TSMC posted record-high earnings, there was a sell-off as the expansion of capital expenditures (CAPEX) was interpreted as increased supply. There is also caution in the market regarding another 'DeepSick moment' in response to the unveiling of the new 'Kimi K3' AI model by China's Moonshot AI.

International oil prices are also rising amid escalating geopolitical tensions between the United States and Iran. An attack by Iran on a U.S. military base in Jordan resulted in American casualties. According to major foreign media reports, as of 6:02 p.m. Eastern Time, September delivery Brent crude futures were trading at USD 90.85 per barrel, up 3.12% from the previous session. This is the first time Brent crude has climbed above USD 90 per barrel since June 11.

Lee Kyungmin, a researcher at Daishin Securities, explained, "Concerns over the KOSPI falling below the 6,000 level have intensified due to sharp declines in global semiconductor stocks during the holidays." He added, "While TSMC's investment expansion is being seen as increased supply, raising fears that the semiconductor business cycle may have peaked, earnings volatility remains limited for now, and forecasts suggest a continued upward trend in earnings through 2027. Therefore, I believe worries about a reversal in semiconductor price trends or a business cycle peak due to supply growth are premature."

This week’s scheduled earnings reports from global AI companies are expected to be a pivotal moment in determining whether the 'semiconductor peak theory' holds true. Alphabet’s earnings will be announced on July 23, followed by Intel's on July 24. Han Jiyeong, a researcher at Kiwoom Securities, commented, “This week marks a turning point, as the earnings of AI companies will simultaneously test both the sustainability of AI demand and the potential end of the de-rating phase for semiconductor stocks.” For the upcoming Alphabet earnings call, Han cited potential changes in CAPEX guidance for 2026–2027 and profitability improvements in the core cloud business as key areas to watch. Regarding Intel, he advised that investors pay more attention to a rebound in server central processing unit (CPU) shipment volumes than to data center sales growth.

Han further noted, “Recent improvements in these companies’ earnings have been partly due to higher average selling prices, so if server shipments also recover this quarter, it will indicate that AI data center investment is expanding beyond GPUs and high bandwidth memory (HBM) to include CPUs and standard memory as well.”

This content was produced with the assistance of AI translation services.