The semiconductor sector is undeniably at the forefront of the current market surge. Samsung Electronics and SK Hynix, two prominent players, are driving the stock market upward as investors flock to their shares. The combined market capitalization of the two companies is approximately 400 trillion won, accounting for more than half of the total KOSPI market capitalization of 739.9 trillion won.
Samsung Electronics remains the top company by market cap, but SK Hynix is closing the gap rapidly. The difference in market capitalization between the two companies has narrowed from about 500 trillion won at the beginning of the year to below 100 trillion won. Recently, SK Hynix has outperformed Samsung in stock price growth. Analysts predict a fierce competition for the title of 'true market leader' between the two companies in the second half of the year. Will an unprecedented shift in market leadership occur in South Korea's stock market history?
SK Hynix Closing In on Samsung Electronics
According to the Korea Exchange on June 19, Samsung Electronics' market capitalization was 2,069.58 trillion won, while SK Hynix's stood at 1,969.91 trillion won, resulting in a gap of 99.67 trillion won. This marks the first time since September 23, 2011, that the market cap difference has fallen below 100 trillion won.Just three months ago, the gap was a staggering 464.92 trillion won, with Samsung at 1,186.89 trillion won and SK Hynix at 721.97 trillion won. Notably, the gap had peaked at 525.42 trillion won on February 27 this year, meaning it has shrunk to one-fifth of that level in just four months. The speed of this narrowing is unprecedented.
Samsung Up 70%, SK Hynix Surges 161% in Three Months
The contrasting fortunes of the two companies can be attributed to their stock price performance. Over the past three months, Samsung Electronics' stock price has risen by 69.78%, buoyed by a rebound in general DRAM prices. However, SK Hynix has seen a remarkable increase of 161.74%, benefiting from the AI boom driven by Nvidia.During this period, individual and institutional investors have played a crucial role in shaping the market. Foreign investors sold a net 1.18 trillion won worth of Samsung Electronics shares and 4.37 trillion won of SK Hynix shares. This selling was offset by significant domestic buying, with individuals purchasing a net 5.99 trillion won and institutions buying 6.65 trillion won of Samsung shares. In the case of SK Hynix, individuals bought 5.79 trillion won, while institutions made a massive net purchase of 7.61 trillion won, propelling its market cap past 2,000 trillion won.
Both Companies Have Positive Outlooks, but Different Investment Points
Both companies are expected to see upward trends in their earnings forecasts, but their investment points differ.Samsung's competitive edge lies in its overwhelming production capacity. Cha Min-sook, a researcher at Korea Investment & Securities, stated, "Samsung's average selling price (ASP) for general DRAM in the second quarter is expected to exceed the previous forecast of 30%, reaching 60%. As a result, the operating profit forecasts for 2026 and 2027 have been revised upward to 377 trillion won and 573 trillion won, respectively."
In contrast, SK Hynix has established a strong position in the high-value AI memory market, leading to superior profitability. Kim Dong-won, head of research at KB Securities, noted, "SK Hynix's operating profit for the second quarter is projected to increase by 649% year-on-year to 69 trillion won, with an operating margin of 77.2%. Driven by accelerating demand for DRAM (81%) and NAND (66%), the annual operating profit for 2026 is expected to reach 280.30 trillion won, and 454.23 trillion won in 2027."
Record High Price Targets Raise Possibility of Market Leader Shift
In light of the changing market dynamics, securities firms have set record-high price targets for both companies. The highest target for Samsung Electronics has been raised by 54% to 570,000 won, according to Korea Investment & Securities. Meanwhile, the highest target for SK Hynix has been set at 3,800,000 won by multiple firms, including Mirae Asset Securities, KB Securities, Shinhan Investment Corp., and Korea Investment & Securities.Interestingly, if both companies reach their price targets simultaneously, the market cap dynamics will shift significantly. Based on the current number of shares, if Samsung reaches 570,000 won, its market cap would be approximately 3,332 trillion won (excluding preferred shares). Conversely, if SK Hynix hits 3,800,000 won, its market cap would be around 2,766 trillion won. Should both companies achieve their targets, the current market cap gap of 99 trillion won would widen back to 566 trillion won, solidifying Samsung's position as the leader.
Ultimately, whether a market cap reversal occurs will depend on the speed of stock price increases and timing. As Samsung aims to regain its competitive edge in HBM by 2027, the key question is whether SK Hynix can capitalize on the demand from big tech companies and the momentum of rising HBM prices to reach 3,800,000 won first.
An asset management official remarked, "Both companies are entering a strong profit growth cycle, but short-term timing differences may arise due to stock price elasticity. Given that the market cap gap has narrowed to below 100 trillion won, the possibility of a historic event where the KOSPI's top market cap position changes, even temporarily, cannot be ruled out."
* This article has been translated by AI.
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