[R&E] KOSPI Rises 1.53% Driven by Semiconductor Demand for Samsung Electronics and TLB, and Reflexive Benefits from Global Power Regulations

[R&E: Research & Epoch] This is News Epoch's signature report that envisions a new era of investment through an integrated analysis of global financial data and domestic securities firm research.

Global Market Brief

The New York stock market recorded a strong performance led by technology stocks, as the robust demand for artificial intelligence (AI) hardware was confirmed. The Dow Jones Industrial Average closed at 53,569.44 points, up 0.20% from the previous trading day, while the S&P 500 index rose 0.72% to 7,730.99 points, and the Nasdaq Composite index jumped 1.57% to close at 26,541.35 points. The Philadelphia Semiconductor Index also rose by 2.33% to record 11,882.17 points.

The core driver was Nvidia. Nvidia recorded a revenue of $96.22 billion (+105.9% YoY, +17.9% QoQ) for the second quarter of fiscal year 2027 (FY2Q27), exceeding the consensus ($92.1 billion) by more than $4 billion. This marks a new revenue record for the 13th consecutive quarter. What actually moved the stock price was not the earnings, but the guidance. The company projected an annual revenue growth rate of over 70% for the next fiscal year (FY2028), whereas the market consensus was at the 44-45% level. The stock price, which jumped over 4% in after-hours trading immediately following the announcement, led to an 8.74% surge during the regular trading session. The fact that the supply chain purchase commitment amount increased by 134% to $279 billion from $119 billion in the previous quarter is a numerical demonstration of the company's confidence that infrastructure investments will continue until at least 2028.

Macroeconomic indicators were mixed. The U.S. Personal Consumption Expenditures (PCE) price index for July rose 3.7% year-on-year, slightly exceeding the market expectation (3.6%). However, the core PCE, which excludes highly volatile food and energy, met market forecasts at 3.3% year-on-year and 0.2% month-on-month. Weekly initial jobless claims came in at 203,000, easing concerns of a rapid cooling in the labor market. The 10-year U.S. Treasury yield rose slightly to 4.6762% (+3.0bp) and the 2-year yield to 4.232% (+2.3bp), but the impact on technology stock valuations was limited. International oil prices (WTI) closed at $83.53 per barrel, up 1.58%, as weakened expectations for U.S.-Iran negotiations coincided with prospects for demand recovery.

Domestic Market Overview

The domestic stock market closed with a steep upward trend yesterday, as the reliability of large-cap technology stocks' earnings was highlighted despite the Bank of Korea's consecutive base rate hikes. The KOSPI index recorded 6,912.37 points, up 104.16 points (1.53%) from the previous trading day, breaking upward through the 120-day moving average (6,885 points). The KOSDAQ index also ended trading at 837.65 points, up 1.30%.

A meaningful shift occurred in supply and demand. In the KOSPI market, foreigners broke their net selling streak by net buying 142.2 billion won, and institutions also purchased 176.6 billion won. Individuals net sold 1.915 trillion won, stepping up for profit-taking. This contrasts with the previous day when the force supporting the index was estimated to be the volume from other corporations, presumed to be share buybacks by Samsung Electronics and SK hynix. In effect, foreign capital returned in just one day onto the floor built by corporate cash.

The Monetary Policy Board of the Bank of Korea carried out a consecutive hike following July, raising the base rate by 25bp from 2.75% to 3.00% per annum. The upward revision of the growth forecast lies behind the stock market responding with strength despite the restrictive monetary policy. The Bank of Korea significantly raised its real Gross Domestic Product (GDP) growth forecast for 2026 from 2.6% to 3.3%, and for 2027 from 2.1% to 2.9%. As the hike itself was in line with market expectations, the actual variable was not the hike itself but the extent of the forecast upgrade, and the market reacted to that magnitude.

In the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,382.0 won, down 2.7 won from the previous day. This is the result of the defense mechanism for the won following consecutive interest rate hikes coinciding with the preference for risk assets driven by the strength of global tech stocks.

Key Industry Issues and Insights

Power Equipment: Reflexive Benefits Created by Trump's 'Power Emergency'

The sector that moved most strongly in the domestic market this day was not semiconductors, but power equipment. This was the aftermath of U.S. President Trump declaring a power emergency and banning the use of certain foreign-made equipment in the U.S. power grid, which further heightened the level of regulations against China across all power transmission and distribution equipment, including transformers, BESS (Battery Energy Storage Systems), and inverters.

The 'Big 3' domestic power equipment companies surged side by side. HD Hyundai Electric(KOSPI: 267260) jumped 12.01%, Hyosung Heavy Industries(KOSPI: 298040) soared 10.08%, and LS ELECTRIC(KOSPI: 010120) rose 8.93%. Cable specialized company Gaon Cable(KOSPI: 000500) also accompanied the rise with a 5.9% increase.

It is necessary to accurately observe the nature of this rise. It is a rise caused not by increased demand, but by the exclusion of competitors. Ultra-high voltage transformers are items that take several years for capacity expansion, making short-term supply expansion impossible. Here, if the largest supplier country is systematically blocked, the pricing power of the remaining operators instantly increases. As it is a moat created by regulations, it comes with the condition that the sustainability of the regulation equals the sustainability of earnings.

The regulatory trend in Europe is also moving in the same direction. Spain is pushing for legislation that mandates data centers newly established or under development with a capacity of 1MW or more to source at least 80% of their power usage from renewable energy. It is a high-intensity regulation that will be maintained until the proportion of renewable energy in the national power mix reaches 90%. This leads to an expansion in global energy storage system (ESS) demand and is analyzed as a factor supporting the order backlogs of companies like Seojin System(KOSDAQ: 178320), which recorded its highest-ever quarterly revenue in the second quarter.

Semiconductors and High-Performance Substrates: Nvidia's Tailwind Reaches Backend Processing

The upward revision of Nvidia's guidance translated into expectations for unit price increases and capital expenditure expansion across the entire domestic semiconductor value chain. The stock prices of Samsung Electronics(KOSPI: 005930) and SK hynix(KOSPI: 000660) rose 2.1% and 3.3%, respectively. What stood out more than the large-cap stocks was the re-evaluation of the backend processing and component supply chains.

The earnings of PCB specialized company TLB(KOSDAQ: 356860) support this trend. Consolidated revenue for the second quarter was 88.2 billion won, up 37.8% year-on-year, and operating profit surged 86.4% to 12.8 billion won. The operating profit margin reached double digits at 14.5%. Module PCB revenue related to SoCAMM2, a next-generation high-performance memory module standard, is analyzed to enter full-scale mass production from the third quarter, increasing 102% from the previous quarter. The operation of substrates for the high-spec Vera CPU has also begun, which is expected to establish a high-margin structure.

Semiconductor test socket manufacturer Okins Electronics(KOSDAQ: 080530) also saw a significant increase in profits, with second-quarter revenue of 35.1 billion won (+29.6% YoY) and operating profit of 8.4 billion won (+163.1% YoY, operating profit margin 23.9%). The core reason is the expansion of component deliveries due to the increasing capacity of downstream customers' test equipment.

Looking at the case of Simmtech(KOSDAQ: 222800), which previously disclosed large-scale new facility investments, it is evident that the intensity of demand for server and high-performance computing substrates has transitioned into a mid-to-long-term investment cycle rather than a short-term industry condition. A characteristic of this phase is that margins are improving at the stages below the large memory companies, as seen in all three of these firms.

Automobile: Hyundai Motor, Upgrading Profitability Targets and Advancing Autonomous Driving

Hyundai Motor maintained its 2030 annual global sales target of 5.55 million units (6% market share) while revising its consolidated operating profit margin target upward from the previous 8-9% to over 9%. This represents a re-establishment of its guidelines from quantitative expansion to qualitative growth. The cost of sales ratio is set to be lowered by 3 percentage points compared to the original plan by 2030, composed of 1.5 percentage points from vehicle full-cycle cost innovation, 1.0 percentage point from material cost reduction, and 0.5 percentage points from localization savings.

The driver that will lead profitability improvement is the expansion of the hybrid (HEV) sales proportion in the North American market. Hyundai Motor plans to set its North American HEV sales proportion at 50% by 2030 and secure a hybrid lineup of more than 10 models. It envisions introducing Extended Range Electric Vehicles (EREV), which use both a battery and an engine to increase the driving range, for the first time in the first half of 2027 to absorb transitional demand for electrification.

Investments in Software-Defined Vehicles (SDV) and AI infrastructure will also proceed in parallel. The company plans to equip its first mass-produced SDV in 2028 with Level 2+ autonomous driving as standard, and is preparing to operate a 100MW dedicated AI data center in Saemangeum in 2029 to support this. Announcing an investment in a robotics production site in the U.S. with an annual capacity of 30,000 units and confirming an initial volume of 25,000 units also demonstrates the acceleration of digital transformation in manufacturing sites.

Market Signals

• Bank of Korea's Consecutive Base Rate Hikes — It continued monetary tightening by further increasing the base rate by 25bp from 2.75% to 3.00% per annum. At the same time, it revised the growth forecast for 2026 upward from 2.6% to 3.3% and for 2027 from 2.1% to 2.9%. Bank of Korea Economic Outlook

• Nvidia, Purchase Commitments Surge 134% — FY2Q27 revenue was $96.22 billion, exceeding the consensus by more than $4 billion. Supply chain purchase commitments for future component procurement recorded $279 billion, up 134% from the previous quarter, revealing long-term strong demand. Nvidia Earnings Release

• Foreigners Turn to Net Buying — In the KOSPI market, foreigners broke their net selling streak with a net purchase of 142.2 billion won. Institutions also bought 176.6 billion won, while individuals net sold 1.915 trillion won. Korea Exchange

• POSCO International Expands Stake in Alaska LNG — POSCO International(KOSPI: 047050) expanded its stake in the Alaska LNG project to 3.5%, investing a total of $35 million. It preemptively secured a 20-year long-term purchasing right for LNG at an annual scale of 1 million tons. DART Disclosure

• U.S. Refineries Continue High-Rate Operation — According to the U.S. Energy Information Administration (EIA), while the weekly refinery utilization rate reached 97%, weekly crude oil inventories only increased by 95,000 barrels, falling significantly short of market expectations (+1.392 million barrels) and maintaining tight supply and demand. EIA Weekly Report

Epoch View: Investment Implications

Two things were confirmed in the market the previous day. One is the fact that earnings visibility precedes interest rates, and the other is that the main agent of supply and demand has changed.

The 1.53% rise in the index despite consecutive base rate hikes is not because monetary tightening is meaningless, but because fundamental trust has recovered enough for the growth forecast to be upgraded from 2.6% to 3.3%. However, this logic only applies to stocks with earnings visibility. In a phase of interest rate hikes, the burden of procurement costs hits companies that are not backed by earnings first and harder. This is a phase where the rise of the index does not mean the rise of the overall market.

The supply and demand aspect is even more noteworthy. What supported the index the previous day was companies' own share buybacks, and on this day, foreigners turned to net buying. The sequence where foreign capital flows in over the floor built by corporate cash typically appears in the early stages of a rebound. However, it is too early to conclude a trend reversal with just one day of net buying. What needs to be verified is for how many days foreign net buying continues, and whether the baton is passed over while there is still capacity for share buybacks.

The surge in power equipment needs to be viewed by distinguishing its nature. This is a rise caused not by increased demand, but by the exclusion of competitors. In items like ultra-high voltage transformers, where capacity expansion takes several years, if the largest supplier country is systematically blocked, the pricing power of the remaining operators instantly goes up. Although highly likely to translate into earnings, it is accompanied by the condition that the moat created by regulations moves together with the regulations. Until the actual growth rate of the order backlog is confirmed, policy sustainability must be looked at before valuation.

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