South Korea’s semiconductor trade rebounded on Wednesday as Wall Street coverage and a rush to unwind bearish positions lifted the country’s two largest chipmakers.
SK Hynix’s US-listed shares closed 8.2% higher at $153.38 on Tuesday.
The momentum carried into Seoul, where its shares gained over 8% by late morning on Wednesday, while Samsung Electronics rose nearly 4%.
Foreign investors and institutions were net buyers as technology stocks pushed the Kospi more than 5% higher.
The moves followed a wave of initiations on SK Hynix. However, their scale also reflected a one-sided market, where short positions had reached a three-year high after July’s correction.
Wall Street puts a higher value on SK Hynix’s AI lead
At least six brokerages began covering SK Hynix’s American depositary receipts with Buy-equivalent ratings, focusing on its leadership in high-bandwidth memory and its exposure to AI spending.
William Blair analyst Sebastien Naji described SK Hynix as the “memory leader for the AI era” and assigned a $260 target.
Stifel analyst Brian Chin initiated coverage with a Buy rating and a $240 objective, while Rosenblatt Securities set the aggressive target at $320.
The US listing gives investors easier access to the Korean chipmaker and could narrow its valuation discount to Micron.
Reuters quoted William Blair analysts saying links to AI and data-centre markets could support a structural re-rating.
That helps explain why SK Hynix outperformed Samsung. SK Hynix holds a stronger position in premium HBM products supplied alongside Nvidia accelerators, while Samsung has spent the cycle trying to close the technology and qualification gap.
Samsung’s rise was therefore more of a memory-sector read-through than a reaction to company-specific analyst coverage.
Crowded short positions turn a rebound into a surge
South Korea’s July decline was intensified by leveraged exchange-traded products, margin calls and the liquidation of crowded positions in Samsung and SK Hynix.
As bullish traders were forced out, investors built aggressive short exposure.
Citi analyst David Chew told MarketWatch that short positioning had become sufficiently one-sided for any stabilisation in AI sentiment to trigger a short-covering rally.
Wednesday’s gains matched that warning.
Short sellers must purchase shares to close bearish positions. When traders retreat simultaneously, those orders can amplify buying from institutions and buyers.
The mechanics do not make the rebound artificial. They show that improved sentiment is producing a price response because positioning had become negative.
Overnight gains in US technology stocks and Palantir’s strong results reassured investors that AI spending was generating commercial demand.
Samsung joins as memory fundamentals remain resilient
The industry outlook remains stronger than July’s stock collapse suggested. AI data centres require rising amounts of DRAM and HBM, while constrained capacity continues to support pricing.
Moody’s upgraded SK Hynix’s debt rating to A3 from Baa1, expecting strong profitability and cash generation over the next 12 to 18 months.
The agency said that strength should provide a buffer against the next semiconductor downturn.
Samsung offers broader exposure to the memory recovery and may appear cheaper to investors unwilling to chase SK Hynix’s sharper rebound.
Its DRAM scale also allows it to benefit when tight supply lifts prices across the market.
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