Market Envy Grows Over SanDisk's Long-Term Vision as KOSPI Opens Higher on Semiconductor Strength Before Reversing on Middle East Geopolitical Risk

On Tuesday, the first trading day after the holiday, the KOSPI and KOSDAQ opened higher, carrying over strength in overseas tech stocks from the previous session. During the holiday, Kioxia surged roughly 15%, near its upper limit, while China's CXMT jumped 12% to close higher, with the tailwind spreading across semiconductor-related stocks. Intraday, the KOSPI climbed to 7,216 points, easily breaking above the 7,200 level, while SK Hynix at one point surged 8-9%.

However, sentiment reversed sharply by late morning. The KOSPI turned down 0.3% before widening its decline to as much as 1% intraday, passing through 6,911 points. The KOSDAQ fell roughly 2%, dropping to the 846 level. Foreign investors reduced their net buying on the exchange to around 790 billion won and turned net sellers of roughly 20 billion won in the KOSDAQ market. The won-dollar exchange rate fell to the 1,108 won level alongside a decline in the dollar index.

Wall Street closed mixed overnight. As the 60-day negotiation deadline between the US and Iran passed, international oil prices and Treasury yields rose together, and the three major indexes along with the Russell 2000 closed lower. However, hardware-related stocks rose on expectations for strong Anthropic earnings, lifting the Philadelphia Semiconductor Index, and this spillover drove gains early in the domestic session led by SK Hynix and Samsung Electronics, along with semiconductor equipment and materials earnings plays such as HPSP, Fadu, Hana Micron, and Isu Petasys.

Some noted that with the KOSPI having risen for six consecutive trading days last week, this was a setup where profit-taking pressure could build. Still, the hosts offered the view that there is no need for major concern about this correction, given the layering of favorable factors including Anthropic's surging earnings, Nvidia's investment in OpenAI's data centers, and strong earnings from semiconductor equipment and materials suppliers.

This week's schedule includes the release of the US Federal Reserve's July FOMC minutes on Wednesday, the opening of the AI Summit Seoul, a possible visit to Korea by Chinese Foreign Minister Wang Yi, and the listing of Chinese robotics firm Unitree. In the US, retail earnings continue with Home Depot on Tuesday, Target on Wednesday, and Walmart on Thursday, while Korea's producer price index (PPI) and trade data are due Friday.

SanDisk held its 2026 Investor Day in the early morning hours US time and unveiled its long-term financial model and growth strategy spanning fiscal years 2028 through 2030. The company said it expects revenue to grow in the mid-to-high teens percentage range annually during this period, while projecting gross margin of roughly 80% and operating margin of roughly 75%.

The most notable takeaway was the announcement that the company would return 100% of free cash flow to shareholders. This means all cash remaining after funding necessary investments would be returned via dividends and other means, and SanDisk shares surged roughly 13.6% overnight immediately after the announcement, crossing the $1,500 mark.

SanDisk also emphasized the stability of its long-term agreements (LTAs). The company explained it has signed numerous long-term contracts with both price ceilings and floors, and that even as the share of such contracts increases, the structure is designed to keep overall operating margin at or above 75%. This signals confidence that long-term contracts can substantially offset pricing cycle risk, long considered a chronic weakness of the memory semiconductor industry.

The hosts noted that this kind of long-term vision and investor communication stands in contrast to Korean companies' practices. They pointed out that domestic firms limit themselves to earnings conference calls where questioners are pre-selected, and that non-deal roadshows (NDRs), the equivalent of investor days, are conducted mainly for institutional investors, leaving retail investors without proper access to information. They suggested Samsung Electronics and SK Hynix could take note of this kind of shareholder return case.

According to Bloomberg, Anthropic's current run-rate revenue could exceed $65 billion. Compared to the same period last year, this represents more than a sevenfold increase, and looking at this quarter's revenue alone, growth reaches 14 times year-over-year. What drew more market attention was that operating income turned positive, seen as symbolically significant as a sign that an AI company, among those that had been making only massive investments, is now actually generating profit.

Anthropic is preparing for an IPO, with fundraising estimated at around $60 billion and a valuation of roughly 800 trillion won being discussed. The market interpreted this as suggesting Anthropic would use the funds raised for AI data center and infrastructure investment, expecting this to drive demand not only for GPUs but also for data center networking and memory expansion. As a result, the Philadelphia Semiconductor Index rose roughly 1.6% despite the overall decline on Wall Street, led by Micron, with optical communications play Coherent rising roughly 7% and semiconductor equipment maker Applied Materials climbing more than 5%, spreading the tailwind broadly.

Around the same time, US Commerce Secretary Lutnick reportedly directly urged Apple not to use Chinese-made memory chips. This was interpreted as favorable news for US semiconductor makers, with expectations of indirect spillover benefits for the domestic semiconductor industry as well. In contrast, Chinese LLM-related stocks listed in Hong Kong, including Kuaishou and MiniMax, weakened.

SK Group Chairman Chey Tae-won, in a CNBC interview, emphasized the need for investment, saying AI agent usage could grow up to 77-fold over the next five years and that memory demand could reach five times current production capacity within 10 years. He also noted that the entire AI value chain, including foundry, GPUs, and memory, needs to grow in balance for the industry to develop without bottlenecks. Separately, news emerged that Nvidia would invest $100 billion in OpenAI's data centers, extending the optimistic mood across the AI ecosystem.

The hosts noted that with Apple's attempt to secure its own memory supply ultimately falling through, if Apple moves to directly secure volume from the market going forward, this could act as upward pressure on commodity DRAM prices. They also pointed to a structural factor compounding this: as Samsung Electronics and other memory makers increase the share of HBM production, commodity DRAM supply is shrinking, and they projected that second-half DRAM prices could rise more than the market currently expects.

Last Friday, semiconductor equipment and materials firms HPSP, Soulbrain, and Hana Micron all reported earnings that beat market expectations, with some posting their highest operating income in the past five quarters. As a result, Hana Micron and HPSP surged more than 7-8% in early trading today.

In the KOSPI market, Isu Petasys stood out, widening its gain to 7% following its earnings release. Both revenue and operating income beat market expectations, and the company also announced plans for further capacity expansion investment and news of securing new customers. The company explained it is benefiting from growth in the application-specific chip (ASIC) market.

The hosts positively assessed that semiconductor equipment and materials stocks are seeing their share prices respond in line with earnings improvement. They noted that the biggest problem has been earnings improving without being reflected in share prices, but that for these equipment and materials firms, earnings and share prices are moving together. They also noted that unlike large semiconductor companies, smaller equipment and materials firms tend not to disclose order contracts below disclosure thresholds out of concern over exposing technology, which has made it difficult for investors to gauge industry conditions.

With Isu Petasys now specifically disclosing its capacity expansion plans, the hosts said this has partly resolved market concerns about capacity limits. They emphasized that this trend is meaningful in that it reflects a virtuous cycle where industry improvement leads to expanded investment by small and mid-sized firms, which in turn feeds into higher employment and potential growth rate.

The 60-day negotiation deadline between the US and Iran expired on August 16 US time without significant progress. President Trump said he would not extend the deadline, and he made remarks suggesting he would strike Oman, a country close to Iran, if it appeared to be taking Iran's side, deepening concerns that the Middle East situation had again grown uncertain. Iran's foreign ministry responded that the US had violated the original agreement and that the 60-day deadline itself was meaningless.

As a result, WTI crude rose as much as 0.6% intraday, crossing $84, while Brent crude climbed above $90. Treasury yields also rose broadly, with the US 30-year yield in particular climbing to around 5.3%, its highest level since 2007. Analysts noted that concerns over fiscal deficits in European countries and rising Japanese government bond yields were compounding the pressure across the broader bond market. They explained that demand for government bonds is falling on inflation concerns even as supply increases due to expanding fiscal deficits and rising corporate bond issuance, pushing prices down and yields up.

During the session, breaking news that a ship transiting the Strait of Hormuz had been struck by an unidentified projectile pushed WTI higher still and widened the KOSPI's decline to 1%. A UK trade body reportedly confirmed engine room damage and crew casualties. The hosts said this US-Iran conflict, which had unclear justification from the start and has since become a war with even blurrier objectives, could see oil price pressure continue to build the longer the Strait of Hormuz situation drags on.

Meanwhile, President Trump posted on Truth Social referencing a friendly relationship with North Korean leader Kim Jong Un and stated he had ordered a reduction in scale for the Korea-US joint military exercises. Interpretations emerged suggesting that as the Middle East situation reaches an impasse, he may be looking to pivot toward a diplomatic breakthrough with North Korea ahead of the midterm elections. President Lee Jae-myung had also formally proposed ending the war to North Korea in his August 15 Liberation Day address, raising the possibility that the two leaders had discussed North Korea issues beforehand. On this news, domestic North Korea-related stocks, which had been sluggish, surged today, and the hosts advised that since investment based on such geopolitical news is inherently unpredictable, investors should approach it cautiously and favor stocks with stable earnings.

Lee Kwangsoo cited the recent case in which the National Pension Service sought 29.9 to 30 billion won in a lawsuit related to Samsung Securities but, after dragging on for eight years, was awarded only 1.8 billion won, noting that if even a powerful institution like the National Pension Service is treated this way, individual investors who suffer losses have little chance of proper compensation. He pointed out that the outcome, in which a victim who did nothing wrong endures eight years only to receive a tiny fraction of the claimed amount, is proof that the system itself is broken.

Korea introduced its securities-related class action system in 2005, but he explained in detail that it remains toothless due to tightly designed restrictions. First, the grounds for filing a class action are limited to just four categories, stock price manipulation, accounting fraud, false disclosure, and similar acts, and to qualify as a plaintiff, one must gather holders representing one ten-thousandth of total outstanding shares, a structure that paradoxically makes it harder to meet requirements for a large company like Samsung Electronics, which has 8 million shareholders.

He also cited requirements for legal representation as an obstacle. The same law firm is restricted to representing no more than three class actions within a three-year period, meaning that even capable large firms can be barred from taking on a new case simply because they already handled a few others. Even after clearing this requirement, a separate preliminary approval process to determine whether the case meets the requirements for a class action must go through three levels of courts before the main case even begins, and if the company appeals during this preliminary stage, the main lawsuit is automatically suspended, meaning the process can effectively require up to six rounds of court proceedings.

As an actual example, he cited the Dongyang Securities (now Yuanta Securities) case involving mis-selling of commercial paper (CP). The firm sold CP from affiliated companies while falsely representing it as safe, and when the companies went bankrupt, thousands of victims emerged; those responsible were criminally convicted of fraud, but the class action itself took about 20 years to reach the Supreme Court, which finally ruled entirely against the plaintiffs in 2024. He noted that most victims dropped out exhausted over the long litigation period, and even those who stayed to the end ultimately received nothing.

Lee Kwangsoo stressed that if investors are to be held to a standard of personal responsibility, the market system itself must first be fairly designed as a precondition. He argued it is unjust to place the burden of losses solely on investors in a market where rule-breaking goes unpunished, and that this accumulating distrust is feeding into broader distrust of the securities industry as a whole. With the second-half committee assignments and ruling party leadership elections now settled, he urged the National Assembly to finally take up discussions on reforming the system, including easing class action requirements, improving restrictions on legal representation, and strengthening punitive damages.