Trying to Double Their Money, They Ended Up Doubling Their Losses... Samsung Electronics and SK hynix Leveraged ETFs Plunge 20% [Stock Market 'Black Monday']

A cold spell in U.S. tech stocks has hit South Korea's leading semiconductor names, deepening the worries of retail investors in Samsung Electronics and SK hynix. Single-stock leveraged exchange-traded funds (ETFs) fell more than 20% in a single day, widening their losses. Investors who entered near the peak now have little choice but to absorb the losses and wait for a rebound.
According to the Korea Exchange (KRX) on the 8th, Samsung Electronics Co., Ltd. fell 10.18% that day, while SK hynix dropped 7.68%. Compared with the 1st, when the two stocks were at their recent highs, their combined market capitalization had shrunk by 64.49173 trillion won in just four trading days.
As the two chip giants swung sharply, investors who bought related ETFs at short-term peaks found it hard to avoid losses. The impact is expected to be especially severe for investors in single-stock leveraged ETFs. Five leveraged ETFs that track Samsung Electronics' stock performance at twice the rate posted losses in the 20% range on the day. Five leveraged ETFs tied to SK hynix also fell by about 16%.
Looking at the ETFs most heavily bought by individual investors over the past week, single-stock leveraged products occupied the top four spots. The No. 1 product, the Samsung Electronics Single-Stock Leveraged ETF, was bought for 1.1611 trillion won. It was followed by the TIGER Samsung Electronics Single-Stock Leveraged ETF, the KODEX SK Hynix Single Stock Leverage ETF, and the MiraeAsset TIGER SK Hynix Single Stock Leverage ETF. Even investors in ETFs that were not single-stock products were left with losses, as the ETF market has long been dominated by Samsung Electronics and SK hynix.
According to Koscom Corporation's ETF Check, 229 domestic ETFs held Samsung Electronics as of that day, with an estimated 51.0554 trillion won in ETF holdings. A total of 213 ETFs held SK hynix, with estimated holdings of 46.2661 trillion won. Given that total net assets in the domestic ETF market stand at about 500 trillion won, the combined ETF holdings of just these two stocks, at 97.3215 trillion won, account for roughly one-fifth of the total.
The daily decline in semiconductor leveraged ETFs with heavy SK hynix exposure approached 18%. Examples include the Mirae Asset TIGER Semiconductor TOP 10 Leverage ETF, which fell 18.73%, and the TIGER 200 IT Leverage ETF, which dropped 18.51%. SK hynix accounts for more than 40% of both products.
The sharp drop in the leading semiconductor stocks reflects the fallout from last weekend's sell-off in U.S. tech shares. Last month, stronger-than-expected U.S. employment data fueled concerns over interest rate hikes, while Broadcom Inc.'s earnings outlook fell short of expectations, sending U.S. artificial intelligence chip stocks tumbling together. On the 5th local time, the Philadelphia Semiconductor Index closed down 10.3%.
Still, South Korean brokerages are viewing the sell-off as a short-term correction and are raising their earnings forecasts. NH Investment & Securities raised its target price for Samsung Electronics Co., Ltd. from 490,000 won to 530,000 won and lifted its target for SK hynix from 3.1 million won to 3.2 million won. The firm said earnings estimates improved as memory demand from Agent AI servers increased and prices for general-purpose memory and high-bandwidth memory (HBM) rose. Ryu Young-ho of NH Investment & Securities said of Samsung Electronics, "As the importance of CPUs grows in the Agent AI era, the DRAM capacity required for a single AI inference server will more than double." On SK hynix, he added, "Strong memory demand in the AI era and changes in the industry structure could lead to a re-rating of memory companies."
nodelay@fnnews.com Park Ji-yeon Reporter