Samsung Electronics Plunges 4.7%, SK Hynix 6.2%, Dollar-Won Exchange Rate Rises for Second Consecutive Day, Breaking 1,500 won Mark Again
The KOSPI index and other figures are displayed on a screen in the dealing room of KB Kookmin Bank on March 26. (photo courtesy of KB Kookmin Bank)
As Google unveiled a new conceptual algorithm technology capable of rapidly processing large language model (LLM) data with fewer resources than before, the stock prices of major global memory semiconductor companies successively declined. Concerns that demand for memory semiconductors could decrease appear to have affected investor sentiment.
The KOSPI, which has a high market capitalization weighting of Samsung Electronics and SK Hynix, fell more than 3% on March 26 and dropped below 5,500. Industry observers believe it is difficult to prematurely predict a contraction in memory semiconductor demand, given that it will take a long time for this technology to be applied and artificial intelligence (AI) is rapidly developing.
The KOSPI closed trading on this day at 5,460.46, down 3.22% (181.75 points) from the previous trading day. Foreign investors net-sold 3.098 trillion won (approximately $2.06 billion) worth of shares, leading the index’s decline. The KOSDAQ index closed at 1,136.64, down 1.98% (22.91 points) from the previous trading day.
On the KOSPI this day, the “semiconductor two-top” Samsung Electronics (including preferred shares) and SK Hynix, which account for 40.76% of the total market capitalization, experienced significant declines. Samsung Electronics fell 4.71% and SK Hynix dropped 6.23%.
The significant drop in Samsung Electronics’ and SK Hynix’s stock prices was largely influenced by ‘TurboQuant,’ a new algorithm technology unveiled by Google in the United States. TurboQuant, announced by Google Research on March 25 (local time), is a technology that enhances AI efficiency.
Generally, AI models must use an enormous amount of memory (storage) to process complex information. In contrast, according to Google Research’s findings, using TurboQuant reduces the required memory amount to one-sixth of what was previously needed. Processing speed was also found to be up to 8 times faster than NVIDIA’s flagship graphics processing unit (GPU) ‘H100’. This is thanks to the application of technology that compresses and processes data with minimal loss.
The New York stock market in the United States reacted first to concerns that demand for memory semiconductors could decrease if algorithm technologies like TurboQuant are applied. On March 25 (local time), the stock price of Micron, the world’s third-largest memory semiconductor company, fell 3.4% from the previous trading day. Stock prices of other memory companies, including SanDisk (—3.5%) and Western Digital (—1.63%), also declined. The stock price of Japanese memory semiconductor company Kioxia also fell 5.7% on March 26 from the previous trading day. U.S. information technology (IT) specialized media TechCrunch pointed out, “Through TurboQuant, there is a possibility that AI models could create a structure that enhances efficiency and reduces memory demand compared to existing methods.”
In the domestic securities industry, analysis suggests that the decline in Samsung Electronics and SK Hynix, among others, following the disclosure of TurboQuant research results, is excessive. This is because Google has only disclosed results through a research paper, and actual commercialization could take a long time. Kim Il-hyuk, a researcher at KB Securities, analyzed, “If data processing efficiency increases, companies will invest more in developing new AI devices and agents, and memory semiconductor demand will inevitably increase again.”
Meanwhile, amidst reports that truce negotiations between the United States and Iran are facing difficulties, the dollar-won exchange rate rose for two consecutive days.
On this day, in the Seoul foreign exchange market, the closing price of the won against the U.S. dollar in weekly trading (as of 3:30 PM) was 1,507.0 won, up 7.3 won from the previous trading day.
The exchange rate started at 1,503.2 won, up 3.5 won, and rose as high as 1,509.3 won.
The dollar-won exchange rate closed weekly trading with a rise for the second consecutive day since the previous day.
On March 23, immediately after U.S. President Donald Trump threatened to attack and destroy all of Iran’s power plants, the exchange rate surged to 1,517.3 won, its highest level in approximately 17 years since the financial crisis.
Subsequently, the direction changed the next day as news of ongoing negotiations between both sides emerged, but as the differences in positions between the U.S. and Iran became prominent, an upward trend is forming again.
The U.S. is reportedly to have delivered a truce proposal containing 15 demands to Iran through Pakistan, the mediating country. However, Iranian Foreign Minister Abbas Araghchi drew a line, stating, “There is still no intention to directly negotiate with the United States.”
Yoon Young-sil
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