Semiconductors: The historical trend is highly copied! In the next month and a half, the market is highly likely to replicate last year’s行情

Recently, everyone has had a question: the industry fundamentals are clearly improving continuously, institutions keep turning bullish, and companies’ earnings are growing sharply—yet stock prices have been falling one after another.

This kind of market where the fundamental picture and price action are completely at odds is not a new phenomenon that started this year. Compare and review the industry’s price action and market sentiment from the past two years, and you’ll find that today’s market environment, capital mindset, and industry cycle are almost exactly the same as those in July 2025.

I. Current price action: the better the performance, the harder it falls—semiconductors show an abnormal divergence

On July 13, 2026, the Bank of Korea (BOK) released its latest industry research report to the public. It provided a clear, objective assessment of the global semiconductor industry’s current situation.

The report explicitly mentioned that the global semiconductor market is still in a tight balance of supply and demand, with no surplus. Chip upgrades and expansion driven by the AI industry continue to be released. This AI-led super-growth semiconductor cycle is nowhere near finished.

This professional judgment, based on all-industry supply and demand data, is the strongest endorsement for semiconductor fundamentals. But in the secondary market, capital flows completely ignored the solid industry fundamentals.

On the very same day this authoritative report was released, the two major leaders in Korea’s memory industry saw their stock prices adjust sharply. SK hynix fell nearly 8% in a single day, while Samsung Electronics also dropped nearly 4% simultaneously.

The magnitude of this adjustment is so large that it’s hard to understand—this sell-off completely disregarded earnings positives. In recent disclosure, Samsung Electronics’ operating data for the second quarter was far above market expectations: overall operating profit was close to 90 trillion Korean won, which is about RMB 59.9 billion, placing it among the industry’s top-tier profitability levels.

But after the impressive earnings were realized, the capital market did not give any positive reaction. Instead, the stock fell more than 7% the day after the earnings announcement. “Earnings hit new highs, but the stock keeps falling”—this kind of move that violates normal investment logic is a typical hallmark of the semiconductor sector’s cyclical cleansing, perfectly matching the price action from the same period last year.

II. Replaying July 2025: the exact same divergence—an exact same ultimate cleansing

Go back to July 2025, and you can clearly see the underlying logic of today’s market: this year’s行情 is a complete replica of last year’s走势.

In July 2025, the global semiconductor industry was in a high-boom development stage. AI-driven intelligent transformation and cloud compute infrastructure construction were being fully advanced, and demand across the whole industry kept exploding. Public market statistics show that in that month, global semiconductor sales reached $62.0 billion, up 20.6% year over year. The memory chip price-up cycle had fully kicked off, and overall industry sentiment was at full throttle.

Consistent with today, the capital market back then also showed an abnormal pattern. Fundamentals kept strengthening, but panic sentiment spread rapidly, and capital concentrated on selling off the technology-chip sector.

Data shows that by early July 2025, the Philadelphia Semiconductor Index had fallen by more than 11% cumulatively over the month. In China A-shares, semiconductor-related indices also saw large-scale volatility, with pessimism in the market reaching its peak. Most retail investors, while the market kept falling, panicked and cut positions, becoming broadly bearish on the outlook.

But history’s movements always nurture opportunities amid extreme pessimism.

After a brief sentiment-driven adjustment, the market quickly returned to fundamentals logic. On July 9, 2025, China A-shares’ Wind Semiconductor Index surged 8.55% in a single day, signaling that the panic adjustment had completely ended.

Entering August 2025, the semiconductor sector saw a full-scale repair rally. The Shenwan semiconductor industry index jumped 25.85% in one month, delivering a smooth and powerful “primary upswing”行情.

Industry data simultaneously validated the logic behind the rally. In August, global semiconductor sales climbed further to $64.9 billion, up 21.7% year over year, and up 4.4% month over month. Memory chip market prices kept rising, and the cumulative gains within the year for some subcategories of products reached as high as 170%.

Looking back, the continuous sell-off in July 2025 and nationwide panic were merely a deep cleansing specifically targeting a high-boom track. It was a normal sentiment pullback within an upcycle—not the end of the industry行情. Investors who fled in panic back then ultimately missed the subsequent primary upswing rally.

III. Today in 2026: market sentiment and industry environment—fully replicating last year

A year later, in July 2026, the semiconductor market is again playing out a familiar script. Whether it’s the bearish narrative driven by market concerns, or the industry’s real fundamentals, everything is highly consistent with last year.

At present, the bearish voices suppressing chip stocks in the market mainly center on three points: AI infrastructure investment relies on debt expansion, overseas tech-sector valuations are too high, and memory chips might face potential overcapacity later on.

These three concerns triggered the concentrated sell-off across global technology stocks—and they are also the core reasons behind this round of continued heavy declines in Samsung and SK hynix. But most of these market concerns are short-term anxiety amplified by sentiment, not the real state of the industry.

A research report from the Bank of Korea accurately pinpointed the essential differences between the current chip cycle and all previous cycles.

In the past, semiconductor up-and-down moves were driven by traditional consumer electronics and end-device cyclical supply-demand fluctuations, with demand showing strong randomness and weak continuity. But in this cycle, the core driving force is the global industry’s intelligent transformation.

Companies across all industries around the world are laying groundwork for AI transformation and compute upgrades in advance. This kind of competitive industrial investment is a long-term, strategic deployment—not short-term speculation.

Especially for AI-dedicated customized chips like HBM high-bandwidth memory: technology barriers are high, building production lines is difficult, and certification cycles are long. The speed of capacity expansion is far behind the market’s growth in demand, making the supply-demand “tight balance” hard to reverse in the short term.

Not only the Bank of Korea—multiple leading global investment banks have reached the same conclusion. Through comprehensive calculations of global compute capital expenditures and chip supply-demand data, institutions such as JPMorgan Chase, Goldman Sachs, and Morgan Stanley have publicly predicted that before 2027, the global semiconductor industry will maintain high growth.

Put simply, AI demand directly lengthens the semiconductor industry cycle. In the past, chip industry cycles had a complete rise-and-fall cycle roughly every three years. Now, with incremental AI demand adding fuel, the cycle has been extended by at least another year, and the continuity of industry buoyancy far exceeds any period in history.

This is the most typical “divergence between sentiment and fundamentals” in the capital market: industrial scale, capital investment, and earnings growth are all hitting new highs, but in the short term the market falls into a deep adjustment due to panic sentiment.

Today, the semiconductor sector is sitting in the bottom range of extreme panic.

Don’t let sentiment control you—those darkest days are already behind us! A massive rebound is on the way!