On October 15, shares of Samsung Electronics and SK Hynix plummeted, causing domestic semiconductor exchange-traded funds (ETFs) to also experience significant declines. Concerns over the profitability of artificial intelligence (AI) investments and intensified competition in the memory market have dampened investor sentiment across the semiconductor sector. While semiconductor-related ETFs dominated the bottom tier of weekly returns, inverse products betting on stock declines recorded double-digit gains.
According to Koscom ETF Check on October 16, the ETF with the largest drop over the past week, excluding leveraged and inverse products, was 'RISE AI Semiconductor TOP10,' which saw a return of -25.61%. Other ETFs such as '1Q K Semiconductor TOP2+' (-24.68%), 'IBK K-AI Semiconductor Core Tech' (-24.48%), and 'TIGER Semiconductor TOP10' (-24.29%) also ranked among the lowest performers. This reflects the overall adjustment in the semiconductor sector.
Products utilizing a covered call strategy were not spared from the downturn. The 'TIGER Semiconductor TOP10 Covered Call Active' fell by 24.19% during the same period. Even with a strategy to secure option premiums, it was insufficient to offset the sharp decline in the underlying assets.
The recent drop in semiconductor stocks has been attributed to a combination of high-interest burdens, skepticism about the sustainability of AI investments, and heightened competition in the memory market. Lee Kyung-min, a researcher at Daishin Securities, stated, "The three external shocks of rising short-term interest rates due to U.S. inflation, doubts about AI infrastructure profitability, and concerns over memory competition have all converged on 'Korean semiconductors.'" He noted that the announcement by China's ChangXin Memory Technologies (CXMT) regarding plans to commercialize next-generation DRAM architecture this year has weakened investor sentiment toward the semiconductor sectors in Korea and the U.S.
Despite the sharp decline, individual investments in semiconductor ETFs continued. Yoon Jae-hong, a researcher at Mirae Asset Securities, reported that "7 trillion won has flowed into Korean semiconductor ETFs, led by individual investors," marking the largest influx since the regulatory changes on single-stock leveraged products at the end of July. He added that the inflow was primarily focused on ETFs tracking the semiconductor sector and the top 10 semiconductor stocks by market capitalization.
The steep drop in semiconductor stocks has sharply differentiated the performance of leveraged and inverse ETFs. The '1Q SK Hynix Futures Single Stock Leverage' fell by 46.04%, while 'TIGER SK Hynix Single Stock Leverage' (-45.79%), 'KIWOOM SK Hynix Futures Single Stock Leverage' (-45.66%), 'SOL SK Hynix Futures Single Stock Leverage' (-45.52%), and 'KODEX SK Hynix Futures Single Stock Leverage' (-45.37%) also recorded declines around 45%.
In contrast, inverse products betting on stock declines surged, showing a starkly opposite trend. The 'SOL SK Hynix Futures Single Stock Inverse 2X' rose by 65.69% over the past week, achieving the highest return. Other products such as 'PLUS Samsung Electronics Futures Single Stock Inverse 2X' (49.29%), 'KODEX 200 Futures Inverse 2X' (42.86%), 'RISE 200 Futures Inverse 2X' (41.46%), and 'KIWOOM 200 Futures Inverse 2X' (41.03%) also saw significant increases.
* This article has been translated by AI.
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