Shares of South Korea's top memory chipmakers, Samsung Electronics and SK hynix, surged over 20% on July 31, with SK hynix hitting the daily trading limit. The rally was driven by Samsung's upbeat Q3 guidance for high-bandwidth memory (HBM4) sales and a rare stock purchase by SK Group's chairman, though analysts caution that declaring a market bottom is still premature.
As of approximately 2:00 PM local time, Samsung Electronics shares jumped 24.88% to 258,500 won, while SK hynix soared 30% to 1,715,000 won, hitting the daily upper limit. The surge lifted South Korea's KOSPI index by 1.8% to 6,600 points.
What triggered the rebound?
The rally followed three consecutive days of sharp declines from July 28 to 30, during which Samsung Electronics and SK hynix shares fell a combined 17%, fueling fears that AI-driven memory demand may have peaked.
On July 30, Samsung Electronics reported a record quarterly operating profit of 89.5 trillion won for Q2, a staggering 1,813.8% year-on-year increase. During its earnings call, Samsung revealed that its advanced wafer foundry capacity is sold out. It reiterated plans to start production at its first U.S. foundry this year and to break ground on a second U.S. foundry by year-end, targeting 2030 for production.
More importantly, Samsung forecast that sales of its sixth-generation HBM4 will more than double in Q3 compared to Q2, with HBM4 accounting for over 60% of total HBM revenue in the second half. Samsung also warned that memory chip supply tightness will worsen next year, driven by cloud service providers expanding AI infrastructure investments, which will boost demand for solid-state drives and HBM. Samsung has secured contracts with all five global data center clients.
SK hynix also showed confidence.
On July 30, a regulatory filing revealed that SK Group Chairman Chey Tae-won personally purchased 3,620 shares of SK hynix, a move seen as a strong signal of support.
According to TrendForce data, memory demand through 2027 will remain driven by AI applications. DRAM will stay in a tight supply environment due to HBM capacity cannibalization and robust AI server demand, keeping prices strong. In contrast, NAND Flash supply is expected to become looser in the second half of 2027 as new capacity comes online and consumer demand weakens, potentially leading to price corrections.
As of 2:00 PM on July 31, the market capitalizations of Samsung Electronics and SK hynix stood at 1,316.62 trillion won and 963.56 trillion won, respectively—still down roughly 40% and 54% from their June peaks.
Is the bottom really in?
Kwon Xiaoxing, a research fellow at the University of International Business and Economics' Center for Korean Peninsula Studies, said the current rebound is more a "technical correction from oversold conditions and temporary liquidity relief" than a genuine reversal. He warned that the market's true stabilization will depend heavily on global tech giants' capital expenditure guidance and the cyclical trajectory of memory chip prices.
Kwon noted that the rally was fueled by strong overnight earnings from Microsoft and Amazon, which confirmed robust AI cloud demand and reversed extreme pessimism about an "AI bubble burst." Additionally, SK Group chairman's stock purchase was viewed as a strong support signal, while the unwind of leveraged positions nearing completion triggered aggressive short covering.
Samsung Electronics and SK hynix together account for a massive weighting in the KOSPI index. Their simultaneous surges of over 20% drove the index to its largest single-day gain ever.
HBM4 enters an explosive phase; semiconductor localization is a long-term trend.
Kwon highlighted that Samsung's earnings call revealed HBM4 is poised for a rapid ramp-up, with Samsung accelerating its U.S. capacity buildout. "Samsung is aggressively catching up to SK hynix, which also plans to significantly expand HBM4 capacity in the second half. HBM4 is moving from an 'introduction phase' into an 'explosive growth phase,'" Kwon said.
Samsung's new U.S. foundry plans reflect a willingness to invest heavily in localized production amid surging AI chip demand and geopolitical tensions.
"In summary, this rebound is a product of 'oversold bounce plus liquidity relief.' Whether the bottom has truly formed remains to be seen. However, two themes worth watching are HBM4's rapid expansion and the irreversible long-term trend of semiconductor manufacturing localization," Kwon added.
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