📉 LG Innotek Plummets 10% Amid Supply-Demand Battle and Value Trap Warnings - 2026.07.20

Today's market is completely divided on LG Innotek. 📉

A 10% Plunge: Why is the Supply-Demand Situation So Harsh?

Today's closing price was 608,000 KRW, down 8.98% from the previous day ^[2]. During the day, it dropped as low as 600,000 KRW, with foreign net buying reaching only 50 million KRW while institutional investors net sold 8.93 billion KRW ^[2]. According to a report by Jaekyung Ilbo, the stock closed nearly 10% lower due to a selling spree by foreign and institutional investors ^[1].

Interestingly, other media outlets reported on the same day that foreigners recorded the second-largest net purchase by buying 298.8 billion KRW worth of LG Innotek ^[5]. Another analysis stated that foreigners sold Samsung Electronics and SK Hynix to buy into the value chain, with LG Innotek ranking first at 785.2 billion KRW ^[6].

Is that really the case? The fact that supply-demand data for the same stock on the same day varies so significantly raises suspicions about information asymmetry or differences in calculation timing. It should also be noted that institutions ranked high in net selling for defensive position adjustments ^[4].

From 'Emperor Stock' to 'Fastest Decline'

LG Innotek, which rose from 260,000 KRW at the start of the year to a peak of 1,780,000 KRW, has now fallen to the 600,000 KRW range ^[3]. This is the background for the expression 'the fastest decline of the emperor stock that rose the fastest.' While the KOSPI fell 4% to close below the 6,500 level, LG Innotek plunged 9.88%, joining the weakness in semiconductor stocks ^[7].

AI Substrates and Robots: Are the Fundamentals Alive?

The stock price alone might look like a nightmare, but there are still high expectations from a business perspective. Analysis suggests that the company is rapidly increasing its status within the value chain through its package substrate business, such as FC-BGA, in line with the accelerating spread of AI semiconductors ^[8]. Furthermore, with the implementation of the 2nd revised Commercial Act, there are forecasts that synergy will be created in the physical AI robot market by combining with LG Electronics and LG CNS ^[9]. Gyeongbuk Province is promoting the 'Gumi-type Investment Promotion Model' to expand cooperation between regional companies, including LG Innotek ^[10].

Peanut's View: Beware of the Value Trap

The confusion in supply-demand and the plunge in stock price mean that short-term volatility has reached its peak. While long-term growth drivers like AI substrates and robots certainly exist, it is necessary to re-examine whether valuations such as PER and PBR are at appropriate levels at the current price. The institutional selling spree can be interpreted as a signal for profit-taking or a risk-off move.

Peanut believes a wait-and-see approach is necessary until supply and demand stabilize. 🛑

From a short-to-medium-term swing perspective, one must always keep a bearish scenario—specifically the possibility of a value trap—in mind even amidst a bullish atmosphere. If institutional selling continues, there could be further downward pressure, so it will be safer to closely observe supply-demand flows rather than engaging in unconditional bottom fishing. 💼

📰 Reference News (10)

1

[Closing Analysis] LG Innotek Closes Down Nearly 10% Amid Foreign and Institutional Selling Spree : Corporate Stock Information - Jaekyung Ilbo

재경일보 · 2026.07.20

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2

LG Innotek Stock Price Falls 4.94% to 635,000 KRW During Trading on July 20

네이버뉴스 · 2026.07.20

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3

[Industry Talk] From 1.78 Million KRW to the 600,000s... LG Innotek, the Fastest Decline of the Emperor Stock That Rose the Fastest

네이버뉴스 · 2026.07.20

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4

[Exchange Institutions] Massive Selling of SK Hynix and Samsung Electronics... Bought Auto and Oil Stocks instead

네이버뉴스 · 2026.07.20

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5

Foreigners 'Sell 2 Trillion' vs. Individuals 'Buy 1.4 Trillion'... Supply-Demand Battle Over Samsung Electronics and SK Hynix

네이버뉴스 · 2026.07.20

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6

Foreigners Sell Samsung and Hynix, Buy into the Value Chain

네이버뉴스 · 2026.07.20

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7

KOSPI Closes Below 6,500 Level with 4% Drop... Semiconductor Stocks Weak

네이버뉴스 · 2026.07.20

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8

Samsung Electro-Mechanics and LG Innotek Strengthen Presence in Component Value Chain Amid AI Expansion

네이버뉴스 · 2026.07.20

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9

2nd Revised Commercial Act to Take Effect in September... LG and Hyosung Drawing Attention as Key Beneficiaries

네이버뉴스 · 2026.07.20

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10

Gyeongbuk Province, Innovation Hub for Semiconductor Materials, Parts, and Equipment,

네이버뉴스 · 2026.07.20

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