"Now Is the Time to Invest Here": 430 Billion Won Poured In Overnight as Money Moves Amid Sluggish U.S. Market

Money Moves into Strong-earning K-Memory
Record Inflows into BlackRock iShares MSCI South Korea ETF Since Listing
Double-digit Gains Since Early This Year...Over 3 Billion Dollars Poured In Over Three Months

Nearly 300 million dollars (432.6 billion won) of fresh money flowed in just one day into the iShares MSCI South Korea ETF (ticker EWY), which is managed by BlackRock in the United States, the world’s largest asset manager. Analysts say funds are rotating into memory-chip makers where strong earnings are expected, while the New York stock market has been sluggish amid uncertainty surrounding artificial intelligence (AI).

Bloomberg reported on February 12 (local time) that 281 million dollars of funds flowed into EWY the previous day. EWY, which was listed in the United States in May 2000, recorded the largest single-day inflow in its 25-year history. Its share price has posted a double-digit gain from the beginning of this year to date. According to Bloomberg data, more than 3 billion dollars has flowed into EWY over the past three months.

This ETF invests in large-cap Korean stocks by market capitalization. Its holdings include Samsung Electronics, SK Hynix, Hyundai Motor, and SK Square. Among them, Samsung Electronics and SK Hynix account for roughly 25% and 20%, respectively. The two semiconductor-related stocks together make up nearly half of the portfolio.

Bloomberg analyzed that funds have poured in because earnings visibility is high. While technology stocks overall are wobbling due to concerns about overvaluation of AI-related names in New York, capital is moving into memory-chip makers where clear earnings benefits from AI are expected.

In terms of share prices as well, Samsung Electronics and SK Hynix have been strong in the Korean market. Samsung Electronics and SK Hynix have risen by about 50% and 40%, respectively, so far this year. Buoyed by the strength of these stocks, the KOSPI has also climbed more than 30% this year, hitting an all-time high. Many observers say expectations for an upturn in the semiconductor cycle have driven the index higher.

Expectations for improved profitability at memory-chip makers are growing as demand surges for high-bandwidth memory (HBM) used in AI servers. The market expects that an increasing share of high value-added products centered on HBM will accelerate earnings improvement. According to FnGuide, Samsung Electronics’ sales and operating profit for this year are forecast at 487.9577 trillion won and 167.5617 trillion won, respectively, up 46.27% and 284.31% from a year earlier. SK Hynix is also projected to achieve sales of 211.6896 trillion won and operating profit of 143.4868 trillion won this year, increases of 117.91% and 203.96%, respectively, compared with the previous year.

Recently, Samsung Electronics and SK Hynix have continued their upward trend. Bloomberg explained that this move came after Micron Technology Chief Financial Officer (CFO) Mark Murphy commented that supply and demand in the memory semiconductor market are becoming tight.

SK Hynix offered a similar assessment. In a recent conference call, the company said, “As investment in AI infrastructure continues to expand, demand is growing explosively,” but added, “A severe supply-demand imbalance has emerged because the industry’s production capacity has not been able to keep up.” It went on to say, “Most customers are having difficulty securing memory volumes and are constantly demanding supply expansion, so we believe overall customer inventory levels have also declined.”

Dave Lutz, equity sales trader and macro strategist at JonesTrading, said, “In a situation where anxiety over industry restructuring driven by AI is affecting many sectors, memory stocks are the safe haven,” adding, “Samsung Electronics and SK Hynix continue to lead the rise in the Korean stock market.”