[R&E] Semiconductors Rebound on US-Iran Ceasefire, Domestic Market Drops -1.6% Due to Mixed ESS and Pharma Sectors

[R&E: Research & Epoch]

This is News Epoch's signature report that forecasts a new era of investment by comprehensively analyzing global financial data and domestic securities firm research.

Global Market Brief

The New York stock market continued its upward rally for two consecutive trading days, boosted by the news of a two-week ceasefire agreement between the US and Iran. The S&P 500 closed at 6,824.66 points (+0.62%) and the Nasdaq at 22,822.42 points (+0.83%), while the Dow Jones Industrial Average recorded 48,185.8 points (+0.58%), successfully rebounding for the first time since the beginning of 2026. A key variable for the market is that the US strongly demanded the immediate and safe opening of the Strait of Hormuz during the negotiations mediated by Pakistan. Expectations for the normalization of the strait, which was virtually closed, led to the stabilization of energy prices and the restoration of supply chains, stimulating global risk asset preference.

The semiconductor sector showed the most distinct strength. As the Philadelphia Semiconductor Index surged to 8,689.53 points (+2.10%), equipment stocks such as Intel (NASDAQ: INTC) (+11.4%), Tokyo Electron (OTC: TOELY) (+10.3%), and Lam Research (NASDAQ: LRCX) (+9.9%) recorded double-digit growth rates. Semiconductor packaging substrate-related stocks also rose together, with Ibiden (OTC: IBIDY) soaring +12.3% and Unimicron (TWSE: 3037) soaring +9.9%. This is interpreted as a signal of the resumption of AI infrastructure investment along with the normalization of the supply chain.

West Texas Intermediate (WTI) crude oil rose to $97.9 (+3.7%), but reduced its gains upon the news of the agreement to open the Strait of Hormuz. The fact that the US core Personal Consumption Expenditures (PCE) price index for February maintained at 3.0%, limiting expectations for an interest rate cut, also kept upward pressure on oil prices in check. The Dollar Index fell slightly to 98.8 points.

Domestic Market Overview

Despite the mitigation of global risks, the domestic stock market closed lower, with the KOSPI at 5,778.01 points (-1.61%) and the KOSDAQ at 1,076.00 points (-1.27%). This is the result of the USD/KRW exchange rate rising to 1,481.5 won (+2.3 won), burdening export stocks, coupled with a deepening wait-and-see attitude ahead of first-quarter earnings announcements. The yields on 3-year (3.345%, +2.5bp) and 10-year (3.660%, +2.8bp) Korea Treasury Bonds rose simultaneously, putting pressure on the valuation of growth stocks.

Today's market is also likely to be mixed. The surge in US semiconductor stocks is positive for Samsung Electronics and SK hynix, but it is highly likely that the rise in the exchange rate will offset the earnings improvement effects of large-cap stocks. However, Kiwoom Securities raising Samsung Electronics (KRX: 005930)'s first-quarter operating profit estimate to 57 trillion won and its 2026 annual operating profit forecast to 297 trillion won is a positive factor.

Key Industry Issues and Insights

The semiconductor sector has secured the strongest rebound momentum on expectations of supply chain normalization. The structural changes in the global semiconductor substrate market are the background behind Meritz Securities raising its target price for Samsung Electro-Mechanics (KRX: 009150) by 18.7% to 700,000 won. Changing the valuation base to the 2027 earnings per share (EPS) and applying the peer group's average multiple of 29.3 times implies that Samsung Electro-Mechanics has begun to be recognized for its premium value in the substrate market.

The automotive sector is in the midst of a long-term growth re-evaluation following the announcement of the '2030 Roadmap'. The targets of 122.3 trillion won in sales and 10.2 trillion won in operating profit by 2026 presented by Kia (KRX: 000270) prove that high profitability can be secured even during the transition to hybrids. In particular, the goal of selling 1.15 million hybrids by 2030 is interpreted as a strategy to monetize the electrification transition period. The plan, which ranges from the unveiling of smart cars in 2027 to a dedicated robotaxi model in 2030, clearly shows the intent to preempt the future mobility market.

Energy Storage System (ESS) related stocks showed a mixed trend due to concerns about supply and demand imbalance. Sama Aluminium (KRX: 006110) is expected to grow steeply as its ESS sales portion expands to 31%, but a decline in profitability due to overheated competition in the global market remains a variable.

The pharmaceutical and biotechnology sector is showing a differentiated flow according to individual favorable factors. Celltrion (KRX: 068270) proved its competitiveness as its new drug candidate was designated for Fast Track by the US FDA, and it is notable that the HLB (KRX: 028300) Group has set out to accelerate growth through organizational restructuring by recruiting professional management.

Market Signals

• Global Semiconductors Surge: Intel +11.4%, Tokyo Electron +10.3% (Expectations of supply chain normalization)

• Domestic Market Decoupling: KOSPI -1.61%, KOSDAQ -1.27% (Rising exchange rate and wait-and-see stance on earnings announcements)

• Samsung Electronics Earnings Forecast Upgraded: 2026 operating profit forecast adjusted upward by 21% to 297 trillion won

• Kia 2030 Vision: Presented targets to achieve 170 trillion won in sales and a 10% operating profit margin

• Energy Price Fluctuations: WTI returned gains due to the Strait of Hormuz opening agreement after a sharp rise

Epoch View: Investment Implications

The US-Iran ceasefire is expected to be a starting point not only for mitigating geopolitical risks but also for stabilizing global supply chains and energy markets. In particular, the surge in the semiconductor sector within the US stock market is a result of the market's conviction in the resumption of AI infrastructure investment, going beyond simple sentiment improvement. The temporary reversal of the domestic stock market is due to a complex combination of exchange rate volatility and wariness ahead of earnings season.

However, from a structural perspective, the trend of improving fundamentals for core domestic companies remains solid. The long-term boom in memory semiconductors, market share expansion in the substrate market, and the proof of hybrid profitability by automakers suggest that South Korean companies have gained an upper hand in the process of reorganizing the global supply chain. The mitigation of geopolitical risks is certain to be a powerful catalyst that will accelerate the recovery of this intrinsic value.

This content was created through News Epoch's proprietary AI algorithm, which analyzes public data from major domestic securities firm research centers and global financial media in real-time. Please note that this is not a solicitation or recommendation for investment in any specific stock.