[R&E] HBM and FC-BGA Momentum Reaffirmed Amid Intel Shock, Materials and EPC Showing Simultaneous Strength... Attention on SAMSUNG E&A OP Beating by 33.1% and Financial Stocks' Share Cancellation

[R&E: Research & Epoch]
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Market Summary: Key Indicators and Trends

Last weekend, the U.S. stock market showed a mixed pattern dominated by the earnings volatility of individual companies. The NASDAQ Composite Index closed up +0.28%, driven by the strength of tech stocks, but the Dow Jones Industrial Average and the Philadelphia Semiconductor Index fell by -0.58% and -1.21%, respectively, in the aftermath of Intel's fourth-quarter earnings announcement. In particular, Intel saw its stock price plummet by -17.03% due to the presentation of disappointing first-quarter guidance and mentions of supply chain bottlenecks, adding a burden to the overall semiconductor sector. However, this is interpreted as a supply disruption issue in the legacy sector rather than damage to the AI cycle itself, and is expected to lead to differentiated strength in the domestic high-performance parts supply chain.

On the macroeconomic front, an accommodative environment was formed, with U.S. Treasury yields falling as the U.S. January manufacturing and services PMIs fell short of expectations. In the foreign exchange market, the dollar weakened on the back of a strong euro and Australian dollar, and amid caution over yen volatility, the dollar index fell to 97.60pt, contributing to the stabilization of the domestic KRW/USD exchange rate. On the previous trading day in the domestic stock market, the KOSPI attempted to break through 5,000p but hit profit-taking, limiting its gains, while the KOSDAQ surged by +2.43%, driven by the largest-ever net buying by institutions. Bio stocks led the rise, and the securities sector showed strength due to a record influx of trading volume and expectations for the 3rd amendment to the Commercial Act. Today's market is expected to see buying spread to the industrials and financials sectors, which have clear earnings momentum, as the solid earnings and structural growth expectations of domestic semiconductor and parts companies counter the Intel shock.

Key Industry Issues and Insights

Intel's sluggishness is diagnosed not as a doubt about the growth of the AI and server markets, but as an individual issue caused by a specific company's failure in foundry and supply chain management. Rather, this suggests a strengthening of Korean companies' leadership in the high-performance parts market. Samsung Electro-Mechanics proved its solid performance with its fourth-quarter operating profit exceeding the consensus by about 5%, thanks to the expansion of FC-BGA supply for AI accelerators and maintaining an MLCC utilization rate of over 90%. In particular, the MLCC Blended ASP is expected to rise an additional +2.0% in the first quarter following a +2.5% increase in the fourth quarter, showing a pattern where highly profitable growth is becoming structured. For ISU PETASYS as well, the application of its Sequential technology to Google's 8th generation TPU is definitive, and structural growth is expected where the selling price will more than double through the transition to high-multilayer boards (TPU v8X/v8AX) of mid-30 layers or higher from 2026.

Meanwhile, the strong performance and structural changes in the industrials sector are emerging as a new driving force in the market. SAMSUNG E&A recorded a consolidated operating profit of 277.4 billion won in the fourth quarter, significantly beating the consensus by 33.1%. This is the result of GPM in both the chemical and non-chemical sectors (14.9% and 15.6%, respectively) far exceeding expectations, and the company is accelerating its portfolio reorganization to expand the proportion of the new energy (hydrogen, carbon capture, etc.) sector to 55% by 2030. In addition, the steel sector is securing momentum, showing an excess upward trend of +19.3% compared to the beginning of the year based on the KRX sector index. This is the result of tightened supply, including the full-scale restructuring of China's steel industry and domestic decisions to extend anti-dumping duties (on Japanese/Chinese hot-rolled steel sheets) and close production facilities (Hyundai Steel). Along with POSCO Holdings, where lithium value is highlighted, the tightness of the core mineral supply chain is promoting a valuation rerating across the materials sector, such as the price of Chinese lithium carbonate futures surging by +7.5% in a single day.

Market Signals

• EPC Earnings Surprise: SAMSUNG E&A's 4Q25 consolidated operating profit recorded 277.4 billion won, beating the market consensus by 33.1%, and presented strong guidance of 10 trillion won in sales and 800 billion won in operating profit for 2026.
  Component Price Increase: Driven by the expansion of Samsung Electro-Mechanics' FC-BGA supply for AI accelerators, the 4Q25 MLCC Blended ASP rose +2.5% QoQ, and an additional +2.0% increase is expected in 1Q26.
  Financial Trading Volume Hits Record High: As of January 23, the cumulative daily average trading volume of the domestic stock market recorded 56.9 trillion won, breaking the all-time high and raising the possibility of upward revisions to earnings estimates for the retail division of the securities sector.

Epoch View: Investment Implications

Today's domestic stock market is judged to offset concerns over the semiconductor industry conditions originating from Intel with the earnings momentum of differentiated domestic parts and materials companies. The market's focus is now shifting to companies that prove actual highly profitable performance rather than expectations for external growth. Therefore, even among the key beneficiaries of the AI cycle, attention should be paid to companies that show specific increases in selling prices and volume with numbers, such as the ASP increase in high-multilayer boards (MLB) (ISU PETASYS) or the expansion of FC-BGA supply for automotive and server applications (Samsung Electro-Mechanics).

At the same time, the industrials and financials sectors serve as solid alternatives amidst macro uncertainty. The successful new energy portfolio reorganization and higher-than-expected operating profit margin shown by SAMSUNG E&A become the drivers for the valuation reassessment of the EPC industry. The financials sector is also in a phase of simultaneously securing the two driving forces of shareholder return and earnings growth, as KB Financial Group's announcement of a 1.2 trillion won share cancellation aligns with the prospect of improved earnings for securities firms based on record-high trading volumes. At this point, a strategy to enhance portfolio stability centering on stocks that clearly reveal performance and a willingness to enhance shareholder value, rather than thematic catalysts, is effective.

This content was generated through News Epoch's proprietary AI algorithm that tracks and analyzes public data from the research centers of major domestic securities firms in real time.
We disclose that this is an objective summary based on collected data, and not a solicitation or recommendation for investment in specific stocks.