Samsung Electronics and SK Hynix are said to be cheap at a forward P/E of around 4x, so why did they fall 7-9% in a day? They say a rebound needs foreign investors to return. Can I trust that?

Why a low P/E is not a safety net

A low P/E can mean the market believes current earnings will not last. Memory is an industry where the P/E hits its lowest when earnings are at their peak.

"Samsung Electronics and SK Hynix have low multiples on a high earnings base, which is not a signal of undervaluation." — Summary of a Morgan Stanley report (cited from KuCoin blog, 2026-10-13)

The same summary puts the lead by which share prices turned down ahead of the earnings peak in past cycles at about four months in 2008 and 2012 and about eight months in 2018. Because this is a secondary citation and the original report could not be confirmed, the exact figures for the lead time are for reference only. Conversely, Bank of America, in its Oct. 16 report, judged that valuations had reached the low end and that earnings, even if weak, were near record levels. The difference between the two views comes down to one question: whether AI has changed the boom-bust cycle of memory.

Asymmetry between gainers and losers: why foreigners are selling

The report's key figure is foreign investors' five-session net selling of about 10.3 trillion won (Money Today basis). There were also reports that foreign net selling this year exceeded 200 trillion won (Segye Ilbo, 2026-10-13). Individuals and institutions took in more than 3 trillion won on 11-05 but could not absorb it.

• The index is concentrated in Samsung Electronics and SK Hynix, so when foreigners sell semiconductors they have no choice but to sell the whole KOSPI.
• USD/KRW rose +0.98% to 1,356 won in a day, widening losses in dollar terms. It is a structure in which currency losses invite selling.
• Korea reflected the U.S. plunge the same day, while markets such as the Nikkei and Hang Seng have not yet, so the possibility of further declines across Asia remains.

Scenario for foreign investors returning

Hyundai Motor Securities saw foreign net buying possibly returning after late-October earnings, the early-November election and Anthropic's mid-November listing. This assumes confidence that funding and earnings to support AI investment will continue (MTN, 2026-10-15). The election and earnings have already passed, yet the selling grew. The conditions of this outlook depend on Nvidia's Nov. 17 earnings and the December U.S. rate path.

What investors should do

• Do not chase a rebound until foreign net buying has continued for at least two days.
• If you hold directly, treat the two stocks combined as only one axis of your portfolio, and make any additional purchases in stages while the exchange rate trades above the 1,350 won level.
• A sidecar only halts program trading for five minutes and does not change direction. This is its reactivation since Oct. 13, so it should be read as a repeat signal.

Sources: KuCoin blog, Benzinga, Segye Ilbo, MTN