Foreign investors rebalanced their Korean semiconductor portfolios this month (July), selling ₩10.9 trillion combined in Samsung Electronics and SK Hynix while buying ₩785.9 billion in LG Innotek and smaller amounts in DB HiTek, Reno Industrial, and ISC during the same period, according to Korea Exchange and Nextrade data released July 27. The shift follows excessive price declines in semiconductor materials and parts companies despite improving earnings outlooks, with LG Innotek down 65.7% from its 52-week high compared to Samsung Electronics' 32.2% decline. Analysts attribute the rebalancing to valuation opportunities in AI-related component suppliers, where earnings growth forecasts range from 23.4% to 78.4% year-over-year while stock prices fell more sharply than memory chip giants.
Foreign Investors Bought ₩785.9 Billion in LG Innotek During July Selloff
Foreign investors net sold ₩12.8897 trillion on the KOSPI market this month (July), with ₩3.0515 trillion in net sales on July 27 alone. SK Hynix topped the net selling list at ₩6.0478 trillion, followed by Samsung Electronics at ₩4.879 trillion during the period. The concentrated selling in the first week of July (June 30–July 4) triggered sharp corrections in both KOSPI and KOSDAQ indices.
LG Innotek led foreign net buying at ₩785.9 billion during the same period, followed by DB HiTek (₩329.6 billion), Reno Industrial (₩259 billion), and ISC (₩238.4 billion). LG Innotek manufactures FC-BGA (flip-chip ball grid array) substrates for AI semiconductors, while DB HiTek produces power semiconductors for AI data center energy efficiency. Reno Industrial and ISC hold global competitiveness in test sockets essential for AI chip performance verification.
Semiconductor Parts Companies Show Earnings Growth Forecasts Up to 78.4%
The price gap between memory chip giants and parts suppliers widened significantly during the correction. Samsung Electronics declined 32.2% from its peak and SK Hynix fell 39.2%, while LG Innotek dropped 65.7% from its 52-week high. DB HiTek fell 57.2%, ISC declined 45.9%, and Reno Industrial dropped 44.0%.
Earnings projections for parts companies improved despite the price declines. According to AI-based investment platform Epic AI, LG Innotek's operating profit is forecast to increase 78.4% year-over-year this year. ISC is projected to grow 69.0%, DB HiTek 32.3%, and Reno Industrial 23.4%. Byun Jun-ho, researcher at IBK Investment & Securities, stated that "if profit momentum slowdown is confirmed for Samsung Electronics and SK Hynix, foreign investors' profit-taking could continue, leading to sustained selling pressure."
Yuanta Securities Analyst Forecasts Potential Return to Large-Cap Chips
The possibility of foreign capital returning to large-cap semiconductor stocks remains under discussion. Lee Jae-won, researcher at Yuanta Securities, stated that "the July semiconductor-centered plunge brought the market overall into an undervalued zone," adding that "as long as US big tech AI capital expenditure continues, there is a possibility that foreign capital will flow back into large-cap semiconductor stocks with significant declines, leading to another reorganization of the buying entities."
Securities industry observers note that investment sentiment toward the semiconductor sector overall has not weakened. The rebalancing reflects foreign investors' view of parts companies as undervalued opportunities in the AI investment expansion cycle, rather than a sector-wide retreat.
FAQ
Q: How much did foreign investors sell in Samsung Electronics and SK Hynix this month (July)?
A: Foreign investors net sold ₩10.9 trillion combined in the two stocks during July, with SK Hynix accounting for ₩6.0478 trillion and Samsung Electronics ₩4.879 trillion, according to Korea Exchange and Nextrade data released July 27.
Q: Which semiconductor parts companies did foreign investors buy during the same period?
A: Foreign investors bought ₩785.9 billion in LG Innotek, ₩329.6 billion in DB HiTek, ₩259 billion in Reno Industrial, and ₩238.4 billion in ISC during the July selling period in Samsung Electronics and SK Hynix.
Q: What are the earnings growth forecasts for the semiconductor parts companies foreign investors bought?
A: According to Epic AI, LG Innotek's operating profit is forecast to increase 78.4% year-over-year this year, ISC 69.0%, DB HiTek 32.3%, and Reno Industrial 23.4%.
