The South Korean stock market, which had been buzzing with anticipation for NVIDIA CEO Jensen Huang's visit, struggled to gain traction on the day of his arrival. The so-called "Broadcom Shock," triggered by a sharp decline in U.S. semiconductor stocks, overshadowed the positive sentiment surrounding Huang's visit.
On June 5, the Korea Exchange reported that the KOSPI closed down 478.82 points (-5.54%) at 8160.59. The index opened at 8323.20, down 316.21 points (-3.66%), and continued to decline. A sell-off sidecar was activated at 9:08 a.m. due to a sharp drop in the KOSPI 200 futures index, halting program sell orders for five minutes.
The KOSDAQ also experienced significant turbulence, dropping 56.93 points (-5.42%) to 992.80, falling below the 1000 mark for the first time since March 4. Although buying interest later helped the KOSDAQ recover above 1000, it still closed in the low 1000s.
The steep decline was attributed to a correction in U.S. semiconductor stocks. On the previous night, shares of Broadcom (-12.59%), Micron Technology (-7.74%), SanDisk (-3.92%), and Western Digital (-3.13%) all fell sharply. Broadcom's forecast of $16 billion in AI semiconductor revenue for the third quarter fell short of market expectations of $17.2 billion, leading to a rapid decline in investor sentiment.
Initially, there were high hopes that Huang's visit would lead to the emergence of new "NVIDIA beneficiaries." During his first visit last year, expectations of collaboration with NVIDIA drove SK Hynix's stock up nearly 22% from the announcement of his visit to their first meeting. Other AI semiconductor-related stocks, such as SK Square (up 9.1%), Samsung Electro-Mechanics (up 8.7%), and Samsung Electronics (up 6.3%), also saw gains during that period.
However, this time the atmosphere has shifted. The anticipation surrounding Huang's visit had already been priced in, and the correction in U.S. tech stocks led to profit-taking across related sectors.
LG Electronics, which had previously hit its upper limit, saw a 16.43% drop the day before, giving back some of its gains. Other companies, including LG (-7.21%), LG CNS (-6.85%), Doosan Robotics (-5.28%), and Doosan (-6.15%), also experienced declines. SK Telecom fell 13.02%, while Naver dropped 4.63%. The weakness in related stocks continued on this day, with LG Electronics (-7.62%), LG (-5.39%), LG CNS (-7.04%), Doosan Robotics (-11.15%), Doosan (-3.33%), Naver (-4.49%), and SK Telecom (-2.30%) all closing lower.
Huang, who arrived in Seoul in the afternoon, is scheduled to have a dinner meeting with Chey Tae-won, chairman of SK Group, Koo Kwang-mo, chairman of LG Group, and Lee Hae-jin, chairman of Naver's board. Over the weekend, he plans to attend a Doosan Bears home game at Jamsil Baseball Stadium, where he will throw the ceremonial first pitch.
Market analysts believe that actual collaboration outcomes will have a greater impact on stock prices than the visit itself. During his stay, Huang is expected to discuss cooperation in physical AI, robotics, AI data centers, and semiconductors with domestic companies.
Lee Kyung-min, a researcher at Daishin Securities, noted, "The influx of expectations surrounding Huang's visit and the profit-taking that followed have increased market volatility. Huang has indicated that he has many meetings planned with companies including Hyundai, LG, SK, Samsung, and Naver, and mentioned that several gifts are prepared for Korea."
* This article has been translated by AI.
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