Photo: Samsung Electronics

 

 

[Alpha Biz= Kim Jisun] Foreign Investment in Samsung Electronics Declines, Threatening 50% Ownership Threshold

The trend of foreign investors selling Samsung Electronics shares continued this year, following last year’s sell-offs, putting foreign ownership at risk of falling below the 50% mark for the first time in over two years. Analysts suggest that the company's lag in high-bandwidth memory (HBM) technology, leading to its exclusion from the artificial intelligence (AI) boom, has contributed to this shift in foreign investor sentiment. In contrast, SK hynix has increased its foreign ownership stake to 55%, widening the gap with Samsung Electronics.

According to data from the Korea Exchange, foreign ownership of Samsung Electronics shares has decreased to 50.30%, a 0.16 percentage point drop since the beginning of the year. This marks the lowest foreign stake since January 25, 2023, when it stood at 50.17%.

Samsung's foreign ownership surged to the mid-50% range in July last year but began to decline in the second half of 2023 due to continued sell-offs. As of this year, foreign investors have sold a total of 7.12 trillion KRW worth of Samsung Electronics shares. In contrast, foreign ownership in SK hynix has increased to 55.77%, after foreign investors purchased 1.56 trillion KRW worth of shares this year, raising the stake from 54.67%.

The primary reason for the increased sell-off of Samsung Electronics shares is its lag in the HBM technology race, falling behind SK hynix. Additionally, Samsung has faced worsening profitability in its legacy memory business due to price cuts from Chinese competitors, and its foundry business has been struggling with a lack of orders, prompting a sharp reduction in investments. SK hynix, on the other hand, is set to begin mass production of the world’s first 10-nanometer-class 6th generation (1c) DRAM next month, while Samsung has delayed its target development timeline to June. As a result, the market expects the current preference for SK hynix by foreign investors to continue for the time being.

 

 

 

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