KOSDAQ Jumps 4%, ABF Substrate Names Break Out While Samsung Electronics Faces Foreign Selling
South Korea’s equity market split sharply on Friday, May 22, 2026. The KOSPI — South Korea’s large-cap benchmark index — gained a modest 0.5%, but the story was in the secondary market: the KOSDAQ, home to South Korea’s mid-cap growth and tech names, surged roughly 4% on the session. Market breadth expanded meaningfully, with 99 stocks passing momentum and flow screens — a signal that institutional interest is rotating beyond a handful of mega-caps into a broader set of Korean equities.
The divergence was not random noise. It reflects a shift in what the market is pricing: not the AI semiconductor giants, but the infrastructure layer underneath them.
ABF Substrate: Morgan Stanley Raises the Bar
The most significant fundamental catalyst of the session came from a Morgan Stanley research note circulating in Korean market channels. The bank raised its forecast for high-performance ABF (Ajinomoto Build-up Film) substrate shortage rates — a key bottleneck in advanced semiconductor packaging — from 15% to 22% by 2030.
ABF substrate is a critical material used in high-end chip packaging, particularly for AI accelerators and high-bandwidth memory (HBM) applications. Supply has been structurally constrained as chipmakers race to stack more logic and memory in tighter packages. A 22% shortage rate by decade’s end implies sustained pricing power for the handful of companies that dominate global ABF substrate supply.
Two Korean names sit at the center of this theme.
Samsung Electro-Mechanics (009150.KS), South Korea’s largest passive components and substrate manufacturer, gained +11.30% on Friday — bringing its five-day return to +32.67%. Foreign investors were net buyers of ₩17.4 billion during the session. Institutional funds were net sellers, suggesting profit-taking after the sharp run-up, but price action held above the ₩1.219 million breakout level that technicians had flagged as the key reference.
Daedeok Electronics (317400.KS), a specialist in ABF and HDI printed circuit boards for advanced packaging, rose +3.35% with five-day gains of +11.41%. Institutional buying of ₩12.7 billion was notable, though foreign investors trimmed ₩7.4 billion — a split that bears watching heading into next week.
Why does the Morgan Stanley revision matter now? Because the market had already begun pricing a substrate recovery, but the revised shortage estimate provides fresh analytical support for continuing that move. The question is whether the 5-day momentum in these names has gotten ahead of near-term fundamentals, or whether the re-rating has further to run as more sell-side houses update their models.
Samsung Electronics: Foreign Selling Resumes After 5-Day Recovery
Samsung Electronics (005930.KS), South Korea’s largest company by market cap and the world’s top memory chip producer by revenue, gave back -2.34% on Friday after a strong five-day run of +8.13%. The one-day pullback was amplified by foreign investor net selling of ₩1.01 trillion — one of the largest single-session foreign outflows for the stock in recent weeks. Program trading added another ₩998.2 billion of net selling pressure.
The timing is awkward. Mirae Asset, one of Korea’s largest domestic brokerages, included Samsung Electronics and SK Hynix (000660.KS) — South Korea’s second-largest memory chipmaker — in its second-half Top Picks list, citing re-rating potential as memory pricing and AI demand visibility improve. That positive framing from domestic research sits uneasily against Friday’s foreign outflow.
The pattern is familiar: a sharp recovery rally, then a test of whether foreign investors use strength to reduce exposure. At ₩1 trillion of selling in a single session, Friday qualifies as the latter. Until foreign and program selling decelerates, Samsung Electronics is likely range-bound rather than in a clean breakout.
Jusung Engineering and the Semiconductor Equipment Breakout
Friday’s top-performing new entrant in momentum screens was Jusung Engineering (036930.KS), a Korean semiconductor equipment maker focused on deposition and etch tools for advanced logic and memory fabs. The stock surged +20.95% in a session characterized by simultaneous buying from both foreign investors (+₩24.3 billion) and domestic institutions (+₩15.8 billion) — a “co-buy” pattern that screeners flag as a higher-conviction entry signal.
The ₩214,000 level becomes the key reference: it represents where the stock opened the gap, and holding above it in the coming sessions would validate the breakout rather than mark it as a one-day spike. Equipment stocks have underperformed the semiconductor supply chain for most of 2025; if capex guidance from Samsung and SK Hynix for the second half of 2026 holds firm, the equipment cycle laggards have room to catch up.
Simtech (222800.KS), a PCB and ABF substrate specialist, also appeared in upper tiers of momentum screens with a +5.02% gain on co-buy flows (foreign +₩8.6 billion, institutional +₩5.8 billion). The name is worth tracking alongside Daedeok Electronics as the ABF substrate supply-chain thesis widens.
Sector Rotation: Beyond Semiconductors
One of the clearer signals from Friday’s session is that leadership is no longer concentrated in semiconductors. The strongest sectors on the day included:
- Pharmaceuticals and biotech: several names saw double-digit gains, extending a recent run that some desks attribute to pipeline updates and improving regulatory sentiment
- Power and energy infrastructure: beneficiary of AI data center electricity demand narratives gaining traction in Korean media
- Semiconductor materials and components (소부장): the ABF names above, plus smaller equipment and chemical suppliers
Telecom was notably weak. SK Telecom (017670.KS), South Korea’s largest mobile carrier by subscriber count, was flat on the day with net foreign selling of ₩58.6 billion and institutional selling of ₩4 billion. Defensive sectors tend to underperform on days when breadth expands into growth names — and Friday fit that pattern cleanly.
The won/dollar exchange rate at ₩1,516 remains a background constraint. A weaker won increases the cost of dollar-denominated imports and adds translation risk for foreign investors considering Korean equity exposure, which partly explains why even a broadly positive day produced heavy foreign selling in liquid large-caps like Samsung Electronics.
What to Watch Next Week
Five checkpoints define the near-term outlook for Korean equity market participants:
Samsung Electro-Mechanics price defense: Does the ₩1.219 million breakout level hold, and does the stock extend toward ₩1.34 million? Institutional profit-taking is normal after a 32% five-day run; the question is whether foreign buying absorbs it.
Samsung Electronics foreign flow: Does Friday’s ₩1.01 trillion outflow represent a one-day flush, or does it continue into Monday? Two consecutive sessions of heavy foreign selling would shift the near-term bias.
Daedeok Electronics foreign buyer conversion: Institutional accumulation is constructive, but ABF substrate stocks tend to get a second leg only when foreign investors also commit. Watch whether foreign selling of ₩7.4 billion shrinks or reverses.
Jusung Engineering breakout validation: A close above ₩214,000 on Monday — ideally on continued co-buy flows — would confirm the equipment sector is re-entering a leadership window.
KOSDAQ breadth composition: Friday’s 4% KOSDAQ surge was broad, but distinguishing between a bio-led one-day spike and a sustained rotation into semiconductor equipment and growth names matters for whether the trend extends.
The ABF substrate re-rating, if the Morgan Stanley supply shortage estimates prove durable, is the kind of multi-year structural theme that tends to produce several distinct entry windows rather than a single breakout. Friday may have been the first window. Whether it holds depends on whether the fundamental thesis outpaces the technical overextension.
Data sourced from KRX intraday flow data, KR Crawler DB (prices_daily, investor_flow_daily, program_trade_daily) as of 16:05 KST on May 22, 2026. Ticker symbols reference KRX listings. This post is market analysis, not investment advice.