iShares MSCI South Korea ETF

EWY

Market cap $21B

The Korean stock market is now interlinked with American portfolios, Christopher Collins writes.

SK Hynix stock slumped in its first full day of U.S. trading as jitters continued to weigh on chip and memory stocks.

Friday, July 10, may have been ordinary for those outside the investment community, but for folks engaged with the market, it marked an opportunity to gain exposure to the second most valuable company in South Korea. On Friday, SK Hynix (SKHY) became available to U.S. investors via the Nasdaq.

The Kospi Index is stuck in a local bear market after falling 21% from its year-to-date high. It ended the week at 7,475, down sharply from the year-to-date high of 9,387.

iShares MSCI South Korea ETF is highly concentrated in Samsung and SK hynix, making it a leveraged AI hardware play. EWY recently entered a bear market, reflecting both global tech volatility and the outsized influence of its top holdings. Despite reforms and increased index weight, South Korea's market remains vulnerable due to governance issues and extreme tech sector concentration.

South Korea's Kospi Index jumped by over 4% on Friday, capping a highly volatile week that saw it plunge to 7,060, its lowest level since May 20. It remains in a local bear market after falling by 20% from its highest point this year.

The cumulative impact of several different narratives – competition, sustainability, excessive leverage, international outflows- has sapped the Korean market of its upward mobility since clocking up a record high in June.

South Korean shares fell sharply for a third consecutive session on Wednesday, with heavy losses in semiconductor stocks and growing concerns over AI-related valuations dragging the benchmark index into bear market territory. The sharp decline followed an early rebound in the session.

Shares of South Korean memory chipmakers Samsung Electronics and SK ​Hynix fell as much as 4.4% ‌and 5%, respectively, in early trade on Wednesday, tracking a broad selloff in U.S. semiconductor ​stocks on growing concerns about the sustainability ​of the AI-driven chip boom.

SK Hynix's blockbuster U.S. listing could reshape semiconductor investing. Here's how chip, Korea, Nasdaq and IPO ETFs stand to benefit.