Terry
Private Fund Portfolio Manager & Trader
Korean equities face a precisely targeted hit from planned US chip tariffs, since Samsung and SK Hynix make their core output in Korea. Commerce Secretary Lutnick told CNBC that chip tariffs will be tied to US investment, with US-made chips exempt; whether Korean-made memory qualifies is entirely uncertain. Seoul said it would monitor and keep talking, but the market didn't buy it. Korea cannot leave the US market and lacks leverage, so pressure may keep building. x.com x.com
Korean equities look due to rise now that leverage is nearly flushed out. Per South Korea's deputy prime minister, leveraged stock trading shrank from 12.4 trillion won on July 30 to 0.8 trillion won on August 7, nearly 96% below the June 25 peak of 19.4 trillion. With retail leverage largely wiped out, a rise is reasonable. Korea is close to a technical bull market, and SK hynix rose 8% after SanDisk's investor day guided about 80% gross margins for fiscal 2028-2030. x.com
Retail leverage and AI concentration have fueled the Korean equities rout. The KOSPI fell more than 14% in a week, its worst weekly decline since 2008. Korean equities will fall further if the rout in SK hynix and Samsung continues, though some dip buyers may already be lining up. x.com x.com
SK hynix looks supported by memory demand sold out at least in 2027. Korean export figures, per unnamed sources, suggested earnings would not be too ugly. No one knows what happens after 2028, so stay flexible both ways. x.com
Korean equities have a central role in the AI trade because Samsung and SK hynix supply most of the memory it needs. Despite the shakeout, the KOSPI leads the major markets shown at roughly +36% this year. The bullish lean faces a flow warning: Korean semiconductor ETF 20-day flows fell from nearly +$4B in June to about -$703M by October 18 as the index approaches rising support. x.com x.com x.com x.com x.com
Korean equities look like a leveraged mania in which money arrived faster than judgment, and borrowers may not survive the drawdown. Samsung and SK Hynix now make up over 54% of the KOSPI, up from 16% in 2016, and margin loans hit a record 36 trillion won, double a year ago, as Koreans surrendered insurance policies to buy stocks. On July 14 Samsung fell 10.70% and SK Hynix 15.37%, and the KOSPI sits near 6,750 from above 8,000. The businesses and the AI buildout remain real. x.com
Memory makers' long-term agreements cannot protect pricing when buyers regain leverage. The market underestimates downside even before a price collapse; SK hynix's agreements price within market-linked ranges, per @jukan05. The agreements will be ripped apart when the market turns to buyers, at the latest when China ramps. SK hynix, Samsung, Micron, SanDisk and Kioxia are exposed. x.com
Korean equities' 2026 crashes were forced-liquidation flushes, not a broken thesis, and memory earnings and exports will carry KOSPI back up. All four circuit-breaker days came from external or technical shocks, a war-driven oil spike, a crowded AI unwind and foreign outflows, amplified by record retail margin debt above 38tn won; none came from Korean earnings breaking. SK Hynix just posted record revenue at a 72% operating margin. The real risk is the memory cycle itself rolling over. x.com
Korean equities and memory chip stocks are not done selling after South Korea hiked rates today. x.com
SK hynix remains a buying opportunity, with its US ADR premium over Korean shares now at an all-time low of 32.66%. x.com x.com
Korean equities are probably going higher as Samsung and SK hynix move toward capital returns while memory fundamentals strengthen. Multiple banks share the Samsung capital-return thesis, SK hynix says returns are imminent, both cite strong demand and long-term agreements, and Apple says memory prices will rise a lot next quarter. With froth and leverage cleared and hyperscaler revenue accelerating, a healthier rally looks likely, depending partly on a reasonable Iran resolution. x.com x.com … Show more
Tight memory supply keeps the AI memory supplier trade in bill-of-materials names if it persists. The investor aleabitoreddit reports an SK hynix shortage outlook through 2030 and an operating-margin result near 80%. HBM allocation and average-selling-price guidance are the next tests; Korea has already priced the earnings print, so the next move depends on who locks capacity. x.com
