Samsung Drops Another 10% Amid U.S.-Iran Conflict; U.S. Foundry Mass Production Delayed Again

TradingKey - On Wednesday, March 4, the U.S.-Iran conflict continued to weigh on Asian markets. By the close of South Korean trading, the benchmark KOSPI Index triggered intraday circuit breakers for the second consecutive day and closed sharply lower, with today's decline reaching 12.11%. Heavyweight Samsung Electronics fell 11.74% today, following a 9.88% drop the previous day.

Analysis suggests that the primary catalyst for the broad sell-off in South Korean stocks is the U.S.-Iran conflict. A potential oil price spike caused by a blockade of the Strait of Hormuz has a more targeted impact on South Korea; as one of the world's largest crude oil importers, the country requires about 2.7 million barrels of crude oil daily, with approximately 70% sourced from the Middle East. Markets fear that rising oil prices will lead to increased inflationary pressure and weigh on the Korean won, thereby triggering a series of ripple effects for the South Korean economy.

Additionally, despite the consecutive plunges, South Korean stocks have still gained about 18% year-to-date, consistently outperforming global markets. With positioning currently overcrowded, investors may be choosing to take profits.

Recently, South Korean media reported that Samsung Electronics has once again delayed mass production plans for its wafer fab in Texas, U.S. Full capacity ramp-up is now expected to be pushed to early 2027, a significant delay from original expectations. This will further widen the progress gap between Samsung and its competitors. Currently, TSMC (TSM) has been advancing the production of 4nm and 3nm chips in the U.S., while Samsung's yields for its 3nm GAA architecture have consistently failed to meet expectations.

Samsung responded that it will complete mass production preparations by the end of 2026, and the plant is expected to be fully operational by then. A more definitive production roadmap is slated for release this June.