Subtitled News: "Lethality of Korean Leverage Proven," "Terrifying"... Global Markets Reel While We "Surrender"

Hsieh Chin-ho, chairman of Taiwan's Wealth Magazine and a prominent economic commentator, recently posted a sharp critique on social media, stating, "The leverage of SK Hynix and Samsung Electronics has snapped."

On July 13, the Taiwanese stock market was expected to rise due to strong earnings from TSMC. However, it only managed a 1 percent gain, shocked by the double-digit plunge of SK Hynix and Samsung Electronics.

Pointing to "2x leverage products," Hsieh stated, "The fundamentals of memory semiconductors do not have major issues yet, but this crash has actually proven the lethality of 2x leverage products."

He noted that the aftermath of the SK Hynix crash caused a chain reaction, dragging down Samsung Electronics and Japan's Kioxia, leading to a collapse in both Korean and Japanese stock markets.

On that day, SK Hynix recorded its largest single-day drop (-15.37%) since its listing in 1996, while Japan's Kioxia also closed down 13 percent.

The shock even reached the U.S. market. On July 13, SK Hynix's American Depositary Receipts (ADRs) plummeted more than 9 percent in New York, while U.S. semiconductor stocks such as SanDisk (-12.6%), Micron (-4.3%), and AMD (-4.2%) also fell in unison.

Foreign media outlets have recently been focusing on the volatility of Samsung Electronics and SK Hynix.

In particular, criticism is intensifying as the KOSPI has been engulfed in extreme volatility since the launch of "single-stock leverage products" in Korea last May, which allow investors to bet on 2x the price movement of the two stocks. This has reportedly shaken the global semiconductor stock market.

On July 14, Samsung Electronics and SK Hynix again showed "V-shaped" movements, repeatedly plunging and surging, before closing up 3.4 percent and 3.7 percent, respectively. Japan's Kioxia and Taiwan's TSMC also saw their stock prices move in a similar pattern.

Japan's Nikkei newspaper also directly criticized the situation on July 10, stating, "Single-stock leverage products are disrupting the market," and adding, "At the center of this vortex is SK Hynix."

In a podcast titled "The Korean Leverage ETFs Shaking Global Markets," Bloomberg diagnosed that the retail investment frenzy and AI-driven semiconductor demand have combined in the form of single-stock leverage ETFs.

Alexander Altmann, head of global equity tactical strategy at global investment bank Barclays, pointed out, "The scale of daily additional buying and selling created by these leverage ETFs is terrifying."

U.S. financial authorities have also warned for several years that single-stock leverage products could pose risks not only to individual investors but also to the financial system as a whole.

Reported by Kim Minjeong | Video by Ahn Jun-hyeok | Graphics by Lee Jeong-ju | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.