Korea Composite Index -1.83%, SK Hynix -6.47%, Samsung -1.23%. And it’s dropping again.
📉 So will everyone on the internet start shouting that memory is topping out?
I just want to say one thing: this sell-off isn’t the cycle—it’s capital moving.
Why can SK Hynix fall 6% in a single day?
Because of ADR arbitrage. On July 10, SK Hynix listed an ADR on Nasdaq, raising about $28 billion—reportedly the largest foreign-company IPO in global history. International investors want to buy ADRs, but they don’t have USD cash on hand. So what do they do? They sell Korean stocks to free up money.
UBS even spelled it out in black and white: buy ADRs and sell Korean shares. This isn’t fundamental deterioration—it’s just the address of the money shifting from Seoul to New York. On the ADR’s first day, it rose 12.76%, trading at a 15% premium versus the Korean underlying—so naturally the Korean shares were hammered.
Why did Samsung get dragged into it too?
There are two reasons. Earnings surged 18 times, but the good news had already been priced in—there was no new surprise. That’s buying expectations and selling facts. On top of that, when foreign investors sell Hynix, they won’t only sell one stock; Samsung, as the second-largest weighted constituent, got hit along with it.
Samsung also announced that it will bring forward production for its Yongin (Yongren) fab—now targeting 2029—meaning more supply is on the way. The market then has yet another narrative to fear.
The memory right business hasn’t changed. HBM orders are booked out to 2030. Contract prices for Q3 are still up 13% to 18%. The capacity gap may not be filled until around 2030. The business is there, demand is there, and prices are still rising. What’s being crushed is the flow of funds—not the supply-demand curve.
What truly caused the sharp plunge in South Korean memory stocks isn’t the cycle topping—it’s capital moving.
For those still shouting “topping,” keep shouting. People who know the business have already positioned their holdings. The day ADR pricing was locked in, Hynix rallied 9% in the morning—selling pressure was released, and the price bounced right back. Once the money finishes moving, the business will return to where it belongs. What do you think?
📉 So will everyone on the internet start shouting that memory is topping out?
I just want to say one thing: this sell-off isn’t the cycle—it’s capital moving.
Why can SK Hynix fall 6% in a single day?
Because of ADR arbitrage. On July 10, SK Hynix listed an ADR on Nasdaq, raising about $28 billion—reportedly the largest foreign-company IPO in global history. International investors want to buy ADRs, but they don’t have USD cash on hand. So what do they do? They sell Korean stocks to free up money.
UBS even spelled it out in black and white: buy ADRs and sell Korean shares. This isn’t fundamental deterioration—it’s just the address of the money shifting from Seoul to New York. On the ADR’s first day, it rose 12.76%, trading at a 15% premium versus the Korean underlying—so naturally the Korean shares were hammered.
Why did Samsung get dragged into it too?
There are two reasons. Earnings surged 18 times, but the good news had already been priced in—there was no new surprise. That’s buying expectations and selling facts. On top of that, when foreign investors sell Hynix, they won’t only sell one stock; Samsung, as the second-largest weighted constituent, got hit along with it.
Samsung also announced that it will bring forward production for its Yongin (Yongren) fab—now targeting 2029—meaning more supply is on the way. The market then has yet another narrative to fear.
The memory right business hasn’t changed. HBM orders are booked out to 2030. Contract prices for Q3 are still up 13% to 18%. The capacity gap may not be filled until around 2030. The business is there, demand is there, and prices are still rising. What’s being crushed is the flow of funds—not the supply-demand curve.
What truly caused the sharp plunge in South Korean memory stocks isn’t the cycle topping—it’s capital moving.
For those still shouting “topping,” keep shouting. People who know the business have already positioned their holdings. The day ADR pricing was locked in, Hynix rallied 9% in the morning—selling pressure was released, and the price bounced right back. Once the money finishes moving, the business will return to where it belongs. What do you think?