TSMC Sets the Pace... Will Concerns Over Semiconductor Peak-Out Be Resolved?

Despite Falling Share Prices, DRAM Spot Prices Continue to Rise
KOSPI Forward PER Falls to 5.12, Lower Than During COVID-19
"Uncertainty Remains, but the Rebound Has Already Begun"

With Taiwan’s TSMC, the world’s largest foundry (semiconductor contract manufacturing company), setting another all-time high monthly sales record, attention is focused on whether concerns over a semiconductor peak-out (passing the cyclical peak) can be alleviated. Analysts evaluate that TSMC’s recent performance momentum demonstrates continuing expansion in global artificial intelligence (AI) infrastructure investment and steady demand for memory chips. The securities industry predicts that domestic semiconductor shares are also entering a normalization phase.

On August 11, the KOSPI index opened at 6,240.06, down 0.95% from the previous trading day, and as of 9:50 a.m., was trading at 6,257.24, down 0.67%. At the same time, the KOSDAQ was up 2.02% at 871.74.

Overnight, the New York stock market closed slightly lower. Diminished hopes for a prompt agreement between the United States and Iran weighed on investor appetite for risk assets. On August 10 (local time), the Dow Jones Industrial Average closed at 53,975.98, down 60.95 points (-0.11%) from the previous session. The Standard & Poor’s (S&P) 500 Index finished at 7,753.11, down 4.53 points (-0.06%), while the tech-heavy Nasdaq Composite ended at 26,605.36, down 85.26 points (-0.32%).

TSMC announced that July 2026 sales reached 467.58 billion New Taiwan dollars (approximately KRW 2.05 trillion), marking a 44.7% increase from a year earlier. The figure is also up 5.6% from June’s previous record-high of 442.68 billion New Taiwan dollars (about KRW 1.95 trillion). Cumulative sales for January to July totaled 2.872064 trillion New Taiwan dollars (about KRW 12.63 trillion), up 37% year-on-year. Bloomberg commented, “Despite market volatility, this is a sign of continued demand for AI hardware.”

In reality, semiconductor fundamentals, including DRAM spot prices and implied volatility indices, remain robust. According to Samsung Securities, DRAM spot prices continued to rise last month even as semiconductor stock prices plunged, with the sharp price adjustments attributed more to sentiment than to actual supply-demand movements. The ongoing upward trend in memory prices continues to be driven by strong demand, indicating that the AI infrastructure investment cycle is unlikely to slow down anytime soon.

Samsung Securities also stressed that the capital expenditures of hyperscale operators relative to order backlogs are by no means excessive, and monetization of cloud and AI services is becoming more visible. The market liquidity previously concentrated in memory chip manufacturers is now being redistributed to big tech firms and logic semiconductor providers such as Nvidia and Broadcom. This sector rotation is seen as reinforcing the continuity of the AI cycle and is expected to eventually lead to a genuine rebound in memory-chip stock prices.

Furthermore, factors previously depressing share prices are also now being analyzed as supply-demand and expectations adjustments, rather than an actual slowdown in demand. Daishin Securities explained that the SanDisk earnings guidance shock was mainly an adjustment to heightened market expectations, and the news that Nvidia is reviewing lower specifications for its ‘Rubin Ultra’ high-bandwidth memory (HBM)—using a mix of 12-layer HBM4E and HBM4—fundamentally reflects a shortage in HBM supply. While these specification changes may create short-term premium margin concerns for SK hynix, for Samsung Electronics, which aims to expand certification and supply of 12-layer HBM4, this could be a decisive opportunity to enter the core supply chain.

It has also been pointed out that there is a structural profit safety net in place that can offset future concerns over cyclical volatility. Hana Securities emphasized the importance of five-year long-term supply agreements (LTAs) signed at a time when memory operating profit margins are close to 70-80%. These LTAs help extend demand by easing customers’ cost-burden increases and ensure stable profits for memory providers in both upcycles and downcycles. Memory prices are also holding steady in the third quarter, supporting the view that a semiconductor investment strategy based on upward earnings revisions for the second half remains valid.

In particular, the extreme disconnect between prices and earnings has provided a strong rationale for a rebound. The KOSPI’s 12-month forward price-earnings ratio (PER) has dropped to just 5.12 times, lower than during the 2008 financial crisis (6.27 times) and at the trough of the COVID-19 crisis in 2020 (7.53 times). During the 1998 foreign exchange crisis or the global financial crisis, share price declines were accompanied by deteriorating earnings forecasts. By contrast, this time, as share prices fell, the 12-month forward earnings per share (EPS) estimate rose by 184% since the start of the year, marking an unprecedented 12 consecutive months of upward revisions. In other words, prices have reflected a crisis, but earnings are not experiencing one.

Additionally, the mechanical selling pressure that had distorted the spot market—i.e., the trading share of single-stock leveraged ETFs based on Samsung Electronics and SK hynix on the KOSPI—has peaked and dropped sharply from 32.5% at the end of July to 3.4% recently.

Kim Dooun, a researcher at Hana Securities, said, “The KOSPI is showing a root-shaped rebound. While foreign capital inflows and investor sentiment have not fully recovered, prices have declined to crisis levels while earnings expectations have actually improved, and upward pressure on U.S. interest rates is also easing.” He added, “The initial rebound is driven by price and interest rates, and the subsequent rally will be propelled by earnings and foreign investors. Fear has not yet ended, but the rebound has already begun.”

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