South Korea is the canary in the coalmine of the AI boom

cityam

Jul 07

(Photo by Kim Hong-Ji - Pool/Getty Images) South Korea’s experiment with leveraged single-stock ETFs has shown how quickly passive investing, concentrated markets and retail speculation can feed on ...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSouth Korea is the canary in the coalmine of the AI boom\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-07-07 18:20 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.cityam.com/south-korea-is-the-canary-in-the-coalmine-of-the-ai-boom/><strong>cityam</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>(Photo by Kim Hong-Ji - Pool/Getty Images) South Korea’s experiment with leveraged single-stock ETFs has shown how quickly passive investing, concentrated markets and retail speculation can feed on ...</p>\n\n<a href=\"https://www.cityam.com/south-korea-is-the-canary-in-the-coalmine-of-the-ai-boom/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"COPP","symbol_name":"Sprott Copper Miners ETF","start_time":0,"source_url":"https://www.cityam.com/south-korea-is-the-canary-in-the-coalmine-of-the-ai-boom/","article_id":"2649981244","we_media_id":null,"thumbnails":["https://www.cityam.com/wp-content/uploads/2026/07/Seoul-south-korea.jpg?w=824&h=463&crop=1"],"rights":{"source":"cityam_highlight","url":"https://www.cityam.com/south-korea-is-the-canary-in-the-coalmine-of-the-ai-boom/","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2649981244","pubTimestamp":1783419602,"columns":[],"sourceInfo":{"source_id":"cityam_highlight","name":"cityam"},"weMediaInfo":null,"summary":" South Korea’s experiment with leveraged single-stock ETFs has shown how quickly passive investing, concentrated markets and retail speculation can feed on one another, says Helen ThomasThe new frontier for the AI boom isn’t Silicon Valley but South Korea. While the country has long been home to technology giants such as Samsung Electronics, the country’s stock market has taken on an entirely different character this year. The benchmark KOSPI has delivered extraordinary gains, having doubled since the start of the year, driven overwhelmingly by a handful of semiconductor stocks at the heart of the artificial intelligence supply chain.The standout performer has been SK Hynix, now the world’s second-largest memory chip manufacturer and the leading producer of high-bandwidth memory  chips. These chips have become indispensable for training and running large AI models, making them a critical component in Nvidia’s AI ecosystem. Together with Samsung Electronics, SK Hynix has become the engi","collect":0,"end_time":0,"defaultTopTitle":"cityam.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"COPP":"Sprott Copper Miners ETF","BK4168":"多种金属与采矿","QTOC":"Innovator Growth Accelerated Plus ETF - October","DRAL":"2倍做多DRAM ETF-Defiance","VTHR":"Vanguard Russell 3000 ETF","HBM":"HudBay Minerals Inc","RAM":"2倍做多DRAM ETF-T-REX","AIPO":"Defiance AI and Power Infrastructure ETF","AGIX":"通用人工智能 ETF-AGIX","ARTY":"ISHARES FUTURE AI & TECH ETF","CHAT":"ROUNDHILL GENERATIVE AI & TECHNOLOGY ETF"},"translate_title":"韩国是人工智能热潮煤矿中的金丝雀","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AIPO":1.5,"ARTY":1.5,"QTOC":1.5,"HBM":1,"RAM":0.9,"COPP":0.6,"DRAL":0.6,"VTHR":1.5,"AGIX":1.5,"CHAT":1.5},"content_text":"(Photo by Kim Hong-Ji - Pool/Getty Images) South Korea’s experiment with leveraged single-stock ETFs has shown how quickly passive investing, concentrated markets and retail speculation can feed on one another, says Helen ThomasThe new frontier for the AI boom isn’t Silicon Valley but South Korea. While the country has long been home to technology giants such as Samsung Electronics, the country’s stock market has taken on an entirely different character this year. The benchmark KOSPI has delivered extraordinary gains, having doubled since the start of the year, driven overwhelmingly by a handful of semiconductor stocks at the heart of the artificial intelligence supply chain.The standout performer has been SK Hynix, now the world’s second-largest memory chip manufacturer and the leading producer of high-bandwidth memory (HBM) chips. These chips have become indispensable for training and running large AI models, making them a critical component in Nvidia’s AI ecosystem. Together with Samsung Electronics, SK Hynix has become the engine of South Korea’s stock market, with the two companies now accounting for around half of the KOSPI’s market capitalisation.But every speculative boom brings its own risks.\n\nAs money has flooded into Korean technology stocks, volatility has surged. The KOSPI has experienced swings on a scale rarely seen in recent years, including days when circuit breakers were triggered after falls approaching 10 per cent. The South Korean won has also weakened sharply against the US dollar, at one stage falling to its weakest level since the global financial crisis, highlighting growing concerns over capital flows and financial stability.\n\n\n\n\n\n\nFree Thinking - City AM Opinion Newsletter\nGet weekly sparky insight and expert commentary on markets, entrepreneurship and innovation from City AM’s Opinion Editor, delivered every Saturday.\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nThe government had hoped to encourage domestic investment and stem the tide of Korean savings flowing into US equities. In May, regulators approved the country’s first leveraged single-stock exchange traded funds, allowing investors to take twice the daily exposure to companies such as Samsung Electronics and SK Hynix.The policy was intended to deepen domestic capital markets. Instead, it may have intensified the very volatility policymakers were trying to avoid.Leveraged ETFsLeveraged ETFs promise a multiple of a stock’s daily return, forcing fund managers to rebalance their positions every day. If investors poured money into a 2x SK Hynix ETF after the stock had already risen, the fund would need to buy even more SK Hynix shares or increase its derivative exposure in order to maintain its leverage. If investors rushed for the exits, the reverse would happen, forcing additional selling into falling markets. In other words, the flows themselves become pro-cyclical, mechanically amplifying price movements in both directions.\n\nWithin weeks, South Korea’s own regulator was questioning whether the products had been introduced too quickly. Lee Chan-jin, governor of the Financial Supervisory Service, delivered one of the more remarkable admissions ever heard from a financial watchdog: “Maybe I should have lain down on the floor to block it. I personally regret I didn’t.”","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":false,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"}}}