Korean retail investors adopted diverging strategies on the 15th and 16th as semiconductor stock volatility intensified amid AI peak-out concerns. KOSPI recovered to the 7200 level on the 15th after a 3-day rally, but fell over 6% to 6820.60 on the 16th, with Samsung Electronics and SK Hynix dropping 8% and 11% respectively. The volatility stems from unresolved concerns about whether US big tech companies will sustain AI infrastructure investments. Some investors increased semiconductor positions viewing the correction as a buying opportunity, while others reduced exposure or raised cash reserves to manage risk.
KOSPI Falls 6% on 16th as Semiconductor Stocks Drop
According to the Korea Exchange, KOSPI recovered to the 7200 level on the 15th. On the 16th, KOSPI fell 463.81 points (6.37%) to close at 6820.60, while KOSDAQ dropped 37.59 points (4.53%) to 791.84. Samsung Electronics and SK Hynix fell over 8% and 11% respectively on the 16th. In US trading, Micron, Intel, and AMD declined in unison, and SK Hynix ADR fell 9%.
Retail Investors Split Between Accumulation and Diversification Strategies
Job seeker Kim (27) shifted from US stocks to KOSPI index ETFs, buying at the 5700 level and taking profits when KOSPI exceeded 9000. Kim stated, "I'm investing primarily in index ETFs rather than specific semiconductor stocks or semiconductor ETFs, considering concerns about semiconductor peaks."
University student Han (22) reduced semiconductor exposure and rotated into power and energy sectors after experiencing sharp losses in domestic semiconductor ETFs during the March US-Iran military conflict. Han said, "I judged that overheating signs intensified with the recent launch of single-stock leveraged ETFs, so I'm diversifying into other industries."
Office worker Lee (26) maintains most investment assets in Samsung Electronics and SK Hynix concentrated ETFs. Lee stated, "I know there are AI overheating concerns, but I think semiconductors will inevitably rise. I see the recent correction as a temporary process and am adding monthly purchases."
Office worker Choi (33) increased cash reserves by selling some semiconductor holdings when KOSPI approached the 8800 level last month. Choi said, "As AI investment peak-out concerns and semiconductor concentration stories repeated, I judged it better to secure response capacity rather than being greedy."
Office worker Seo (32) purchased SK Hynix in the 1 million won range, watched it rise to 2.9 million won without selling, then increased positions again in the 2.2 million won range. Seo stated, "While the semiconductor cycle is good, I think funds could eventually move to other industries. I felt I need to set stop-loss criteria going forward, not just look at profits."
Shinhan Analyst Advises Maintaining Core AI Positions While Diversifying
Lee Jung-bin, researcher at Shinhan Investment & Securities, stated, "The important variable in investment decisions for AI leading stocks is not current earnings but changes in future growth rates. Even if earnings are solid, upward momentum can slow the moment guidance and growth expectations break."
Lee continued, "While it's early to discuss the end of the AI memory industry cycle, we're likely entering a phase where growth rates gradually normalize rather than repeating steep earnings improvements like in the past. Rather than sharply reducing leading stock weight, a tactical response that maintains existing core AI positions while combining industries with high earnings visibility such as automobiles, banks, and cosmetics is rational."
The market views US big tech Q2 earnings announcements starting at the end of this month — Microsoft, Meta, Alphabet, Amazon — as a watershed for gauging whether AI investment has peaked.
FAQ
What happened to KOSPI and semiconductor stocks on the 16th?
KOSPI fell 463.81 points (6.37%) to close at 6820.60 on the 16th. Samsung Electronics and SK Hynix dropped over 8% and 11% respectively on the same day.
Why are Korean retail investors adopting different semiconductor investment strategies?
Investors are split due to unresolved concerns about whether US big tech companies will sustain AI infrastructure investments. Some view the correction as a buying opportunity and are accumulating positions, while others are reducing semiconductor exposure or raising cash reserves to manage volatility risk.
What did Shinhan Investment analyst Lee Jung-bin recommend regarding AI semiconductor stocks?
Lee Jung-bin stated it's early to discuss the end of the AI memory cycle, but recommended maintaining existing core AI positions while combining industries with high earnings visibility such as automobiles, banks, and cosmetics rather than sharply reducing leading stock weight.
