[R&E] KOSPI Rises 0.68%, Driven by Simmtech's Large-scale Facility Investment and Westinghouse-triggered Nuclear Power Sector Rotation

[R&E: Research & Epoch] This is News Epoch's signature report that integrates and analyzes global financial data and domestic securities firm research to envision a new era of investment.

Global Market Brief

The New York stock market saw its major indices trend upward across the board as a drop in macro interest rates coincided with the stabilization of raw material prices. The previous day, the New York stock market closed with the blue-chip Dow Jones Industrial Average rising 0.30% from the previous trading day to 53,577.40 points, while the S&P 500 Index climbed 0.32% to 7,677.28 points, and the tech-heavy Nasdaq Composite Index advanced 0.66% to 26,151.30 points. The yield on the 10-year US Treasury note fell to 4.6288% (-6.7bp), relieving valuation pressure on technology stocks. In addition, reports from Russian media regarding a potential ceasefire agreement between the US and Iran and the possible opening of the Strait of Hormuz reduced geopolitical risks, and West Texas Intermediate (WTI) crude oil dropped 3.12% from the previous day to $82.36 per barrel, easing inflation concerns. This stimulates risk-on sentiment in the global asset market and acts as a driver to increase the investment attractiveness of large domestic manufacturing stocks.

Domestic Market Summary

The previous day, the domestic stock market closed higher despite selling pressure from foreigners, driven by a strong influx of buying from individuals and institutions and the recovery of losses in semiconductors. The KOSPI index rose 0.68% from the previous trading day to 6,742.74 points, and the KOSDAQ index increased 1.70% to 827.15 points. In the KOSPI market, foreign investors continued net selling for three consecutive trading days, but individuals and institutions net purchased 1.0517 trillion won and 1.1707 trillion won respectively, defending the index. In particular, other corporations recorded a massive net purchase of 1.5920 trillion won, solidifying downward rigidity. In the Seoul foreign exchange market, the USD/KRW exchange rate closed at 1,382.8 won, down 0.6 won from the previous day, revealing that the easing of exchange rate volatility supported the upward reversal of the domestic index.

Key Industry Issues and Insights

Semiconductors & Substrate Components: Substrate Capacity Competition Seen Through Simmtech's 274.2 Billion Won Facility Investment
Domestic package substrate companies have laid the groundwork for mid- to long-term growth by proactively securing production capacity (Capa). Simmtech (KOSDAQ: 222800), a company specializing in semiconductor package substrates, announced a new facility investment plan totaling 274.2 billion won the previous day. This investment will be allocated by distributing 145.9 billion won to establish a dedicated factory for SoCAMM, a next-generation memory module, 105.1 billion won to expand the high-multi-layer MSAP substrate line, and 23.2 billion won to the system IC (SiP, FC-CSP) sector. The investment period is until the end of 2027, and full-scale sequential operations will begin in the first quarter of 2028. From the time the production line is completed, it is analyzed that it will yield an additional revenue increase effect of approximately 450 billion won annually. The expansion of capital expenditure (CapEx) decided amid the rapidly increasing demand for AI server-bound SoCAMM is a strategic choice to actively respond to the tightened global substrate supply. Meanwhile, Sapien Semiconductor (KOSDAQ: 452430), a system semiconductor design company that surged the previous day, also reaffirmed its turnaround to surplus in the second quarter (revenue of 7.2 billion won, +257.7% YoY, operating profit of 300 million won), adding momentum to the differentiated performance trend of materials, parts, and equipment companies.

Energy & Nuclear Power: Westinghouse-triggered Nuclear Sector Rotation and Daechang Solution's SMR Special Steel Supply
The news that the US government proposed an equity investment in Westinghouse to South Korea, coupled with expectations of a surge in electricity demand stemming from artificial intelligence (AI) data centers, ignited a strong rotational rally in the nuclear power and power equipment value chain. With expectations for infrastructure expansion, KEPCO E&C (KOSPI: 052690), a leading company in the nuclear power design sector, surged 20.3% the previous day, and Doosan Enerbility (KOSPI: 034020), a manufacturer of main nuclear power equipment, also rose 10.6%, drawing market supply and demand. Large-scale power grid expansion policies, such as the upward revision of maximum power demand through the government's 12th Basic Plan for Electricity Supply and Demand and the power supply agreement for the Honam region semiconductor industrial complex, are also backing mid- to long-term supply and demand expectations.

Order performances in the private nuclear power equipment sector have also materialized. Daechang Solution (KOSDAQ: 096350), a manufacturer of special steel cast steel products, signed an 82.6 billion won contract with Arabelle Solutions, a subsidiary of France's EDF, to supply special steel materials for SMRs (Small Modular Reactors) and large nuclear power turbines. This is a mega-contract approaching 138.0% of Daechang Solution's consolidated revenue last year. The contract period runs until March 2032, and mid- to long-term revenue visibility has been secured as 70% of the total contract amount, or 60.5 billion won, consists of fixed volume, and the remaining 30%, or 22 billion won, is variable volume. Amid the global explosion in electricity demand, this is interpreted as a trend where the quality and unit price competitiveness of domestic nuclear power materials, parts, and equipment companies strengthen their bargaining power in the global market.

Automotive & Mobility: Hyundai Motor and Kia Wage Deal and North American Tariff Conflict Risks
Labor and management at Hyundai Motor Group dramatically reached a tentative agreement on wage and collective bargaining, successfully resolving concerns over large-scale production halts in the second half of the year. Labor and management of Hyundai Motor (KOSPI: 005380) derived an agreement featuring a 100,000 won increase in basic pay, 400% + 12.7 million won in management performance bonuses, and the issuance of 15 shares of stock. In tandem, labor and management of Kia (KOSPI: 000270) also agreed to prepare a tentative agreement that includes a 100,000 won increase in basic pay, 400% + 12.7 million won in performance and encouragement bonuses, and 47 shares of stock. The cumulative production disruption caused by partial and full strikes held by the Hyundai Motor union in July and August is estimated at approximately 55,000 vehicles, amounting to about 2.3 trillion won. The derivation of this tentative agreement is expected to act as a key variable in controlling additional losses due to strike risks and driving the achievement of annual sales targets centered on high-value-added vehicles.

However, external trade conflicts surrounding the North American supply chain remain a cautionary factor for the overall industry. As US President Trump announced a massive increase in tariffs on Canadian passenger cars, auto parts, and steel to 50% starting January 1, 2027, the conflict is spreading in all directions, with Canada countering by declaring retaliatory tariffs of approximately $20 billion. This proves that a new proactive task of bypassing tariff barriers and diversifying the supply chain has been assigned to the domestic automotive value chain, which is pursuing localized procurement and production optimization in North America.

Market Signals

• Simmtech Announces 274.2 Billion Won Facility Investment: Simmtech announced an investment to expand production capacity totaling 274.2 billion won in response to the growing demand for AI-oriented SoCAMM module substrates and high-multi-layer MSAP substrates. It is expected to sequentially commence operations starting in the first quarter of 2028, generating an annual revenue increase of 450 billion won.

• Korea FT's Solid Revenue and Share Buyback: The 2Q26 revenue of Korea FT (KOSDAQ: 123410) was 217 billion won, a 7.0% increase year-on-year. Out of the 10 billion won share buyback plan announced in May, the company executed the purchase of 353,000 shares in the second quarter alone.

• Price Increase for Chinese Steel Raw Material Coke: Steelmakers in China's Shandong and Hebei regions have additionally raised the price of coke by 100 yuan per wet ton and 110 yuan per dry ton. Iron ore futures on the Dalian Commodity Exchange also closed 1.27% higher at 716 yuan per ton.

• D&C Media's Base Effect from Previous Year's High Growth: D&C Media (KOSDAQ: 263720) reported 2Q26 revenue of 15.9 billion won, a 35.0% decrease year-on-year, and operating profit of 2.2 billion won, down 50.0%, recording a reverse base effect due to the weighted effect of hit product sales in the previous year.

Epoch View: Investment Implications
The stabilization of global macro indicators, overseas nuclear power equipment orders, and trillion-won facility investments by large domestic substrate companies signal an improvement in the stock market's constitution. The US government's proposal for equity investment in Westinghouse and expectations of a surge in AI power demand have strengthened the policy-driven downward support line of the nuclear power and power grid value chain, and large parts manufacturers have begun establishing massive new factories targeting an industry turnaround. A strategy of expanding weight is valid, centered on finished vehicle makers that have removed uncertainty through strike agreements, as well as semiconductor substrates and SMR materials, parts, and equipment sectors that have entered a structural surplus phase. KOSPI's 0.68% higher close suggests it has begun to project fundamental improvements into prices in earnest, moving beyond a simple rebound from an excessive drop in the index.

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 does not constitute an investment solicitation or recommendation for specific stocks.