Five KOSDAQ semiconductor materials, components, and equipment stocks declined between 22% and 46% from June 19 to July 22 despite reporting strong first-quarter earnings growth. Seojin System fell 46.30%, IO Technics dropped 38.11%, ISC declined 24.46%, Soulbrain decreased 24.45%, and Reno Industrial slid 22.46%, with the five stocks averaging a negative 31.16% return compared to the KOSDAQ index's 22.19% decline during the same period. The price corrections occurred amid concerns about AI infrastructure investment sustainability and semiconductor sector peak-out fears, despite these companies reporting year-over-year operating profit increases ranging from 24% to 237% in the first quarter. Analysts attribute the decline to profit-taking following rapid price appreciation rather than fundamental deterioration in AI demand. Foreign investors net purchased over 1.3 trillion won of these five stocks during the one-month decline period, with concentrated buying occurring from late June to early July.
Five Companies Report Q1 Operating Profit Growth of 24% to 237%
Reno Industrial, a semiconductor test socket and pin specialist, recorded revenue of 99.8 billion won and operating profit of 47.3 billion won in the first quarter, representing year-over-year increases of 27.2% and 35.4% respectively. IO Technics, which specializes in laser processing equipment for semiconductors, reported revenue of 115.1 billion won and operating profit of 29.8 billion won, up 35.7% and 105.8% respectively. ISC posted the largest growth with revenue of 68.3 billion won (up 115.5%) and operating profit of 23.6 billion won (up 237.8%), driven by increased sales of AI semiconductor sockets and system-level test high-value products, with AI-related revenue reaching 55.3 billion won or 81% of total revenue. Soulbrain, a semiconductor process chemical materials company, reported revenue of 263.8 billion won and operating profit of 44.7 billion won, up 25.9% and 24.0% respectively. Seojin System posted an operating loss of 33 billion won, but its semiconductor division, which accounts for 40% of total revenue, produces wafer transfer equipment and power drive devices used in etching and deposition processes.
Foreign Investors Net Purchase Over 1.3 Trillion Won During Price Decline
Foreign investors net purchased 366.3 billion won of ISC, 307.5 billion won of Reno Industrial, 256 billion won of IO Technics, 215 billion won of Seojin System, and 171.3 billion won of Soulbrain from June 19 to July 21. The buying activity was particularly concentrated between June 30 and July 3, when foreign investors net purchased approximately 200 billion won each of ISC, Reno Industrial, and IO Technics. The total foreign net buying across the five stocks exceeded 1.3 trillion won during the one-month period.
Hana Securities Analyst Attributes Correction to Profit-Taking
Kim Rok-ho, a researcher at Hana Securities, stated that it is more reasonable to interpret the recent correction as an adjustment for companies whose stock prices rose rapidly, rather than a collapse in AI demand. Kim indicated that stock prices will enter a recovery phase once short-term earnings and medium-term guidance are confirmed. The recent stock price declines are analyzed as being driven more by deteriorating investor sentiment across the semiconductor sector rather than individual company fundamentals, with profit-taking concentrated in memory stocks that had surged since the beginning of the year affecting component stocks as well.
FAQ
Q: What caused KOSDAQ semiconductor component stocks to fall from June 19 to July 22?
A: The stocks declined due to concerns about AI infrastructure investment sustainability and semiconductor sector peak-out fears, combined with profit-taking after rapid price appreciation earlier in the year, according to Hana Securities analyst Kim Rok-ho.
Q: How much did foreign investors purchase of these five semiconductor stocks during the price decline?
A: Foreign investors net purchased over 1.3 trillion won of the five stocks (ISC, Reno Industrial, IO Technics, Seojin System, and Soulbrain) from June 19 to July 21, with concentrated buying between June 30 and July 3.
