Korea's semiconductor exports are at a record, so why do foreign investors keep selling? I'm curious why the stock prices aren't following earnings.
2026-10-18
Earnings show up in the numbers, but prices are set by flows
Semiconductor exports for October 1-10 were $12.1 billion (+170.9%), the highest for the period. Total September exports were $120.9 billion, a monthly record (Korea Times, 2026-10-01, 2026-10-12). The earnings outlook itself has not wavered. What has wavered is who is buying.
Who is selling and who was propping up prices
| Party | Recent activity | Interpretation |
|---|---|---|
| Foreign investors | Net sold KRW 199.1 trillion on the KOSPI market from January 2 to October 12. From September 1 to October 2, net sold KRW 12.0 trillion of SK hynix and KRW 5.2 trillion of Samsung Electronics | Reacting to position reduction and credit worries, not earnings |
| Share buybacks | Samsung Electronics' program ended October 6. SK hynix's KRW 40 trillion buyback and cancellation is due to expire in mid-October | A large buyer that was supporting the downside is gone |
| Institutions | Net sold KRW 682.4 billion on October 16 | Kept supplying shares even on the rebound day |
| Foreign investors, October 16 | Net bought KRW 341.4 billion for the first time in nine sessions | Unconfirmed whether this is a change of direction or a short-term bounce |
Sources are Korea JoongAng Daily, Korea Times, Korea Herald and other October 2026 reports, and the report itself.
Why large-cap semiconductors get hit first
Structural reasons overlap with the flows story. Because two semiconductor stocks carry a large weight in the Korean market, when overseas investors respond to AI credit risk or Chinese memory competition (CXMT's announcement on October 13), these most liquid names become the selling outlet. They are sold despite strong earnings not because investors think they are wrong, but because they are the easiest assets to sell to reduce portfolio risk.
Conditions for a reversal
Hyundai Motor Securities thinks foreign buying could gradually return around the late-October earnings season (Korea Herald report, 2026-10). Samsung Electronics' Q3 cash dividend of about KRW 30 trillion will be finalized at the late-October board meeting, and the first test is whether dividend expectations fill the gap left by the end of the buyback. Neither is confirmed yet.
What investors should watch
- Watch whether foreign net buying continues for three or more sessions. A one-day purchase was reversed in the last rebound too.
- Before Monday's Asian open, first check that EWY fell 3.70% in the U.S. If a gap down occurs, liquidations of leveraged products could pile on.
- A large gap between earnings and price is not evidence of a bottom. Until flow indicators turn, a staged approach is right.
- Equipment and biotech names that had fallen the most rebounded quickly, but unlike large-cap semiconductors they depend less on foreign flows, so their path may differ.