Global funds are rushing into Korean chips, with trading volume of Korean ETFs on U.S. exchanges hitting a record high, and SK Hynix leveraged products selling out!

Global funds are rushing into Korean chip stocks, triggering abnormal fluctuations in ETF markets from the United States to China, with trading volumes and premium rates hitting new records.

On Thursday, the trading volume of the iShares MSCI Korea ETF listed in the U.S. soared to a record $6.4 billion; on the same day, a leveraged product of a single Korean chip stock listed in Hong Kong also hit a historic high.

Following this sentiment, the Korean semiconductor ETFs in the A-share market experienced a brief dip at the open in the afternoon, then quickly rebounded, rising over 7% at one point, with the highest intraday price reaching 4.65 yuan, a new high since listing. The premium rate also climbed to 26.16%. Due to the large increase in premium, a domestic semiconductor fund was temporarily suspended from trading during the day.

The abnormality reflects the huge demand from global investors for Korean stocks. The Korea Composite Stock Price Index (KOSPI) has risen 45% year-to-date, driven mainly by Samsung Electronics and SK Hynix—market participants see these two companies as the main beneficiaries of the AI wave.

These two companies together account for nearly half of the iShares ETF’s weight, which has gained 55% this year. In comparison, the S&P 500 has increased by less than 1%, while the Philadelphia Semiconductor Index has risen 16%.

US-listed Korean ETFs hit record single-day trading volume

On Thursday, the iShares MSCI Korea ETF recorded a record $6.4 billion in daily trading volume, vividly illustrating the global enthusiasm for Korean chip assets. Samsung Electronics and SK Hynix together make up nearly half of this fund’s weight, making it a key tool for foreign investors to position in Korea’s AI industry chain.

However, according to Kang Jinhyeok, an analyst at New Korea Securities, the strong demand for this fund may not come entirely from U.S. investors. As the dollar strengthens, boosting the actual returns of dollar-denominated funds, retail investors in Korea are increasingly allocating more to overseas ETFs, which is also a significant factor driving the surge in trading volume.

Record-breaking trading in leveraged products related to A-shares

The Hong Kong market has also seen high leverage demand for Korean chip stocks. The CSOP SK Hynix Daily 2x Leverage Product, which bets on SK Hynix’s stock price doubling, reached a daily trading volume of HKD 2.4 billion (about $307 million) on Thursday, setting a new record. This indicates that Hong Kong investors are actively using leverage tools to concentrate their bets on leading domestic Korean chip companies.

Mainland Chinese investors are also accelerating their entry. Huatai-PineBridge’s China-Korea Semiconductor ETF was briefly suspended on Friday due to a surge in intraday premium to over 17%, a historic high. The fund holds significant positions in Samsung Electronics and SK Hynix, and also includes domestic chip company Cambrian as one of its main holdings.

The root cause of this ETF abnormality lies in the strong performance of the Korean stock market itself. The KOSPI has risen 50% so far this year, making it one of the best-performing major indices globally, while the S&P 500 has gained less than 1%. Samsung Electronics and SK Hynix, as key suppliers of AI-related storage chips, have attracted substantial global capital betting on AI infrastructure expansion.

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