Experts split on semiconductor stock sales as hyperscaler spending and lead times draw scrutiny

Experts are divided over when investors should sell semiconductor stocks, including Samsung Electronics and SK hynix, with one urging an immediate reduction in exposure amid liquidity pressures and another backing continued buying through the first half of next year on industry fundamentals.

In a discussion presented by The Man Who Explains the Economy (Kim Kwang-seok TV), business leaders Lee Hyeong-su and Jang Woo-jin joined Professor Kim Kwang-seok to assess the market outlook and potential selling signals. Their differing conclusions reflected their emphasis on industry indicators, earnings fundamentals and liquidity.

Lee advised investors to watch hyperscalers—large cloud service providers whose spending is central to semiconductor demand. He identified downward revisions to capital expenditure, or CAPEX, forecasts during their earnings announcements as the most dangerous signal.

A hypothetical cut in planned investment this year from $200 billion to $180 billion would warrant caution, he said. Investors should also consider the possibility that hyperscalers could fail to raise funds in capital markets.

Lee also highlighted the relationship between spot prices and fixed contract prices in the memory semiconductor market. Historically, investors viewed a “death cross,” when spot prices fell below fixed contract prices, as a signal to sell. Under recent market conditions, however, he said investors should be more alert to the point when spot prices rapidly catch up with fixed contract prices and the gap narrows.

A sudden shortening of lead times—the period between placing an order and receiving a product—would be another warning, he said. It could indicate that supply is becoming more readily available and prices could turn down sharply.

Kim took a more immediate view, describing current liquidity conditions as a crisis and recommending an active reduction in holdings.

“The opportunity to reduce exposure is now,” he said, arguing that persistent inflation was making it difficult for interest rates to fall and intensifying pressure on liquidity.

He described AI expansion as producing a “growth plus growth” pattern that fuels inflation. With Federal Reserve officials beginning to discuss inflation expectations, he said, conditions were preventing interest rates from turning lower.

Kim attributed the semiconductor market’s current decline more to an increase in the volume of shares being supplied to the market than to an imbalance between industrial supply and demand. He cited government restrictions on leveraged investment, continued selling by foreign investors and inflows of money aimed at attacking a particular fund as factors combining to push the market down.

“If you sense liquidity drying up, I recommend responding by selling in stages,” he said. Holding cash for a longer investment horizon could help investors generate returns with greater psychological breathing room, he added.

Jang offered cautious optimism, saying the money semiconductor companies were earning in the real economy remained unquestionably solid. Although liquidity pressures could constrain investment at some companies, he expected a sorting process in which cash-rich AI Form companies dominate the market and expand investment further.

He said that process could produce a “take all” phenomenon in which the remaining companies lead the market together.

“There is no need to rush to sell,” Jang said. He argued that the current correction was likely a period of range-bound trading as market leadership shifted from memory semiconductors to other areas.

He pointed to NVIDIA’s performance in 2025 as an example of how strong business results could coexist with a share price confined to a trading range. Expecting the Q, or shipment volume, and E, or earnings, cycles to get fully under way through the first half of next year, he said buying in stages remained a valid strategy.

On inflation, Kim said the inflation rate in the United States was likely to peak in May, potentially removing much of the rationale for further interest rate increases.

He also forecast, on arithmetic grounds, that international oil prices would be more stable in 2027 than they are now because aggregate demand had fallen sharply. He said that view was consistent with the IEA’s forecast that international oil prices were currently at their peak.

Despite their differences, the three agreed that changing market conditions required investors to weigh the arguments and make their own decisions. Kim’s case centered on liquidity, Lee’s on industrial indicators and Jang’s on the fundamentals of the semiconductor business.

Source: original video (YouTube)