Hong Kong leveraged chip products tumble as Chey backs SK Hynix on AI memory demand
SK Hynix’s steep selloff hit linked Hong Kong leveraged products, while Chey Tae-won and Meritz Securities argued AI-driven memory demand and tighter DRAM supply support longer-term fundamentals.
Hong Kong-listed leveraged products tied to Samsung Electronics and SK Hynix fell sharply after a July 17 selloff in South Korean chip stocks, with China Southern 2x Long Samsung Electronics down more than 20% and CSOP 2x Long SK Hynix down more than 18%. SK Hynix dropped 12% in its biggest one-day fall in nearly 18 years and Samsung Electronics lost 8.8%, amid South Korean restrictions on leveraged chip funds and market talk of margin-call-driven forced selling. SK Group Chairman Chey Tae-won said he could not predict SK Hynix’s share price next month but said expanding AI-related memory demand supports a longer-term uptrend, while Meritz Securities researcher Kim Sunwoo said the market is misreading fundamentals, viewing reported price cuts in long-term supply agreements as a strategic move to secure generative AI and AI data-center demand as DRAM supply tightens.
- leveraged products: Investment instruments designed to amplify the daily move of an underlying asset, which can magnify gains and losses.
- margin call: A broker demand for additional collateral that can force investors to sell positions if market moves reduce available margin.
- DRAM: A type of memory chip used in computers and servers.