After the KOSPI rebounded from a nearly 30% plunge in a single month, Morgan Stanley—which had floated a “semiconductor peak” thesis just two weeks ago—has abruptly changed its tune, now calling the pullback a “buying opportunity.” As semiconductor bellwethers Samsung Electronics (005930.KS) and SK Hynix (000660.KS) surged for a second consecutive day, foreign investors who had been on a selling spree snapped up nearly 3 trillion won (approximately $2.0 billion) in net purchases, dramatically reversing market sentiment.
According to the Korea Exchange on the 22nd, the KOSPI soared more than 5% from the previous session, reclaiming the 7,100 level. This followed a 3.56% gain the day before, marking a second straight day of strength. Samsung Electronics and SK Hynix, which had tumbled more than 30% over the past month partly due to leveraged single-stock products, each rose 3–4% or more over the two-day stretch. SK Hynix in particular surged as much as 9% in early trading, reclaiming the 2 million won (approximately $1,353) mark, while Samsung Electronics jumped around 6% to retake the 270,000 won (approximately $183) level.
As of 10:30 a.m., foreign investors had scooped up a net 1.78 trillion won (approximately $1.2 billion) worth of shares on the main KOSPI market. They had already posted a net buying bias of 295.2 billion won (approximately $199.8 million) the previous day, but by mid-morning alone, their net purchases had swelled to six times that amount. In stark contrast, retail investors sold a net 1.37 trillion won (approximately $927.1 million) over the same period, while institutional investors were net sellers to the tune of 420 billion won (approximately $284.2 million).
Behind the sharp rebound lies a dramatic shift in stance from Morgan Stanley, previously dubbed the “grim reaper of semiconductors.” In an investor note, Morgan Stanley analyst Joseph Moore wrote, “Long-term concerns that memory semiconductor shortages will intensify in 2027 and 2028 are stronger than ever,” adding that “the recent stock price correction represents a buying opportunity.” He forecast that memory prices would rise at least 25% quarter-over-quarter in the third quarter of this year.
This is the polar opposite of the view Morgan Stanley presented just two weeks ago, when it advised clients to reduce exposure to the semiconductor sector, arguing that it was past its peak, and to pivot toward U.S. Big Tech instead. Industry observers note that the reversal may be a natural strategic adjustment following the sharp sell-off, but also point out that flipping one’s view in just two weeks is highly unusual.
“When teams are very large, views can differ, and during periods of high volatility like this, views can shift decisively,” explained Kim Jun-young, an analyst at IM Securities. Morgan Stanley has a track record here: it previously forecast a “semiconductor winter” for 2024, only to admit a year later that its prediction was wrong.
“I think it’s appropriate to view foreign brokerage reports as just one opinion among many,” said Shin Seung-jin, an analyst at Samsung Securities. Lee Jin-woo, head of research at Meritz Securities, added, “Overseas firms tend to present short-term outlooks or index-level targets, whereas domestic firms tend to speak with a somewhat longer-term perspective.”
Other global investment banks, however, are sticking to their guns. JPMorgan and Goldman Sachs are maintaining their existing investment views that memory semiconductors have entered a long-term boom cycle. “Positive analysis on the memory sector from global investment banks and bargain-hunting in the U.S. stock market supported investor sentiment,” assessed Lee Kyung-min, an analyst at Daishin Securities.
Overnight on Wall Street, semiconductor-related stocks posted double-digit gains, with Micron Technology surging 12% and SanDisk jumping 14%. SK Hynix’s American Depositary Receipts (ADRs) also soared 13.75%, further fueling the recovery in South Korea’s semiconductor investment sentiment.
Meanwhile, retail investors continued their selling spree during the day’s sharp rally. They are repeating a pattern of “scalping”—buying when the market plunges and selling when it surges. According to an analysis of NH Investment & Securities’ mobile trading system users, as of the 20th, when SK Hynix had plunged for two straight sessions to close at 1,764,000 won (approximately $1,194), the proportion of investors sitting on losses reached 63.5%. This suggests that retail investors who suffered significant losses during the recent rout are using the rebound to “escape at break-even.”
In online investment communities, a new coinage—”JOMO” (Joy Of Missing Out)—is trending in place of “FOMO” (Fear Of Missing Out). Comments such as “Thank goodness I didn’t buy when they were shouting that it was going to 3 million won” and “The person who didn’t buy is the winner” are flooding forums. Last month, when the KOSPI was flirting with the 9,000 level, anxiety over being “the only one who missed out” ran high; now, after the index plunged to the 7,000 level in just one month, a sense of relief at having stayed out has spread.
The KOSPI closed at 6,747.95 the previous day, down 25% in a single month—the steepest decline among major global indices tracked by Investing.com. Over the same period, the U.S. S&P 500 fell just 0.39%. Total trading value on South Korea’s stock market also shrank 33%, from 51.81 trillion won (approximately $35.1 billion) early this month to 34.52 trillion won (approximately $23.4 billion) the previous day. Investor deposits likewise contracted to 112.53 trillion won (approximately $76.1 billion), down from the near-130 trillion won (approximately $88.0 billion) level seen last month, underscoring the chill in investor sentiment.
While Morgan Stanley’s change of heart served as kindling for the short-term rebound, the potential for a slowdown in AI investment and peak-cycle concerns for the semiconductor industry continue to coexist in the market, suggesting that volatility is likely to persist.