"I Like the High Dividends" "This Is a Better Bet Than Samsung Electronics and SK hynix": What Foreign Investors Bought While Selling 14.7 Trillion Won

Foreign Investors Sell More Than 10 Trillion Won of Samsung Electronics and SK hynix Alone
7 of Top 10 Net Purchases Are Semiconductor Materials, Components and Equipment Stocks

Foreign investors, who have driven down the index by unleashing nearly 15 trillion won in net selling on the KOSPI market this month, have been buying shares in companies involved in semiconductor materials, components and equipment. As currency and macroeconomic uncertainties grew, foreign investors concentrated their selling on large-cap semiconductor stocks such as Samsung Electronics and SK hynix, primarily through passive funds that track the broader market. Yet even as they pulled out of large-cap stocks, foreign capital flowed into high-quality semiconductor materials, components and equipment stocks with technological monopolies in the artificial intelligence (AI) supply chain.

On the 13th, Samsung Electronics and SK hynix share prices were displayed on a market board at Hana Bank's dealing room in Jung-gu, Seoul. The KOSPI closed at 6,035.35, down 348.89 points (5.46%) from the previous day, while the KOSDAQ closed at 837.03, down 12.16 points (1.43%). Yonhap News.

According to the Korea Exchange on the 14th, foreign investors posted net sales totaling 14.6947 trillion won on the KOSPI market this month, based on the previous day's closing prices. Their selling was concentrated in large-cap semiconductor stocks, which account for a dominant share of the index.

Among the stocks with the largest net foreign sales this month, SK hynix topped the list, with investors selling 7.4417 trillion won worth of shares. Samsung Electronics followed with 3.1536 trillion won, and SK Square, whose value is heavily tied to its semiconductor holdings, came next with 881.1 billion won. Foreign capital outflows from these three leading semiconductor stocks alone totaled 11.4764 trillion won.

Over the same period, however, companies involved in semiconductor components, equipment and substrates featured prominently among the 10 stocks with the highest net foreign purchases, showing a clear contrast with large-cap semiconductor stocks.

Woori Financial Group was the stock foreign investors bought most this month, with net purchases of 560.3 billion won, reflecting financial stocks' characteristically high dividends and defensive qualities. But from second place onward, numerous specialists in semiconductor materials, components, equipment and substrates featured among the names, all part of the semiconductor value chain. Seven of the 10 stocks with the highest net purchases were semiconductor-related, attracting a combined 779.7 billion won in foreign capital.

In particular, billions of won flowed into ISU Petasys (156.9 billion won), which has secured a place in the supply chain for high-layer-count multilayer printed circuit boards (MLBs) for AI servers and major technology companies, as well as Samsung Electro-Mechanics (183.9 billion won) and Simmtech (117.8 billion won), specialists in high-value-added substrates.

Buying also spanned the broader semiconductor ecosystem, including Jusung Engineering (104.6 billion won), a leader in atomic layer deposition (ALD) equipment; Koh Young (75 billion won) and Hana Micron (68 billion won), which are expected to benefit from high-bandwidth memory (HBM) and advanced packaging; and DB HiTek (74 billion won), which has benefited from expectations of a recovery in the foundry market.

Foreign investors' selling of large-cap stocks can be seen as the result of passive funds mechanically managing risk amid currency uncertainty and stock market volatility. Meanwhile, active funds have not abandoned the structural growth momentum of the AI semiconductor industry. In effect, capital that left large-cap stocks has flowed into materials, components and equipment companies with irreplaceable technological capabilities and earnings visibility.

Until foreign selling eases, a strategy focused on semiconductor materials, components and equipment appears necessary. Lee Jaewon, an analyst at Yuanta Securities, said, "At present, the only potential sources of buying demand are shareholder returns and foreign investors. Since semiconductors are the sector best positioned to benefit when those sources return, we believe it is currently better to focus on that sector and, while it takes a breather, on semiconductor materials, components and equipment and energy storage systems (ESS), which are similar AI infrastructure plays, rather than endlessly buying Samsung Electronics and SK hynix at lower prices. If a slowdown in foreign net selling is confirmed, it will also be necessary to increase holdings in Samsung Electronics and SK hynix, which are expected to resume shareholder returns."

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