Samsung Electronics, SK hynix trade near flat after trimming losses

The stocks of South Korean chipmakers Samsung Electronics Co. and SK hynix Inc. pared early losses to trade near flat on Friday as investor sentiment improved following Micron Technology Inc.’s stronger-than-expected earnings.

Samsung Electronics shares were trading at 276,750 won ($202.98) as of 9:25 a.m., up 0.27 percent from the previous session.

The stock opened 0.91 percent lower at 273,500 won and fell as low as 271,500 won, down 1.63 percent, before quickly recovering its losses.

SK hynix shares were trading at 1.851 million won, up 0.98 percent from the previous session.

SK hynix briefly fell to 1.825 million won, down 0.44 percent, after the market opened but soon moved higher and turned positive.

The three major U.S. stock indexes closed slightly higher overnight.

The Dow Jones Industrial Average and the Nasdaq Composite each rose 0.04 percent, while the S&P 500 gained 0.19 percent.

Investor sentiment toward memory and semiconductor stocks improved after Micron Technology posted strong earnings following the previous day’s market close, sending the Philadelphia Semiconductor Index up 1.59 percent.

Micron surged 3.03 percent, while SK hynix’s American depositary receipts (ADRs) rose 5.08 percent, Sandisk Corp. gained 2.75 percent, Nvidia Corp. climbed 1.09 percent and Advanced Micro Devices Inc. (AMD) advanced 0.65 percent.

Foreign and institutional investors were net sellers of 160.9 billion won and 25 billion won, respectively, on the Kospi as of the morning session, while retail investors were net buyers of 87.6 billion won.

Separately, Korean optical communications stocks also rallied in early trading.

Taihan Fiberoptics Co. was trading at 18,000 won on the secondary Kosdaq as of 9:23 a.m., up 5.26 percent from the previous session.

The stock opened 2.81 percent higher and climbed as much as 6.90 percent to 18,280 won during intraday trading.

Mercury Corp. hit its daily upper limit, surging 29.80 percent, while OE Solutions Co went up 10.94 percent; Woori-Net Co. up 6.44 percent; SOLiD, Inc. up 6.1 percent; Lightcom Co. up 4.57 percent; and RFHIC Corp. up 4.17 percent.

On Wall Street overnight, optical communications stocks rallied following news that Micron would expand its capital expenditures, with Coherent Inc. up 10.9 percent; Ciena Corp. up 7.77 percent; and Lumentum Holdings Inc. up 7.67 percent.

The gains appeared to reflect expectations that the expansion of artificial intelligence (AI) data centers will boost demand for optical interconnect components such as high-speed optical modules and lasers.

“Micron’s expansion of capital expenditures helped drive solid gains in semiconductor equipment, optical communications and energy stocks in the U.S. market,” said Seo Sang-young, an executive director at Mirae Asset Securities Co.

Yeom Dong-chan, an analyst at Korea Investment & Securities Co., noted that “expectations are growing that suppliers of optical communications components for AI data centers will benefit, with a bill introduced in the U.S. Congress to ban the use of Chinese-made optical transceivers in sensitive federal government systems and the possibility of additional restrictions on next-generation products also being discussed.”