The CSOP SK Hynix Daily (2x) Leveraged Product plummeted 11.31% during intraday trading on Thursday, extending a brutal sell-off that has erased more than three-quarters of the fund's value from its peak just over a month ago.

The sharp decline in the leveraged product is directly tied to the ongoing weakness in the underlying stock, SK hynix. The South Korean chipmaker's shares have been under heavy pressure since late June, with the stock falling nearly 46% from its all-time high. The rout accelerated on July 29 after SK hynix reported second-quarter earnings that fell short of market expectations, despite a five-fold surge in operating profit. Adding to investor concerns, the company guided for a 50% increase in capital expenditure this year, with total investment expected to reach at least $31 billion, fueling fears of oversupply and an overheated AI investment bubble.

The broader semiconductor sector has also been facing a severe correction, with the Philadelphia Semiconductor Index on track for its largest single-month decline since 2008. The negative sentiment has been compounded by a regulatory overhaul in Hong Kong, where authorities have mandated a shift from fixed 2x leverage to a flexible "maximum 2x" structure for products like the CSOP SK Hynix leveraged ETF. The policy change, set to take effect on August 3, has sparked uncertainty among investors about the product's future ability to deliver amplified returns during any potential rebound, further weighing on its battered net asset value.