Korean retail investors bet W1.5tr on 3x US semiconductor ETF during market rout

Korean retail investors bought nearly 1.5 trillion won ($1.04 billion) worth of a triple-leveraged US semiconductor ETF over the past week, betting on a rebound while aggressively buying the dip as chip stocks tumbled.

According to the Korea Securities Depository, domestic investors net purchased $1.05 billion worth of the Direxion Daily Semiconductor Bull 3X Shares (SOXL) from June 23 to June 30. SOXL is an ETF that tracks three times the daily return of the Philadelphia Semiconductor Index.

The Philadelphia Semiconductor Index fell 8.43% over the same period and dropped 20.66% in June, as semiconductor stocks came under pressure from a combination of intensifying competition from Chinese memory chip makers and fears that the memory chip cycle had peaked.

Korean investors kept buying even as the index declined, snapping up not only broad index ETFs but also leveraged ETFs tracking individual chip stocks.

They net purchased $9.85 million worth of the T-Rex 2X Long SanDisk Daily Target ETF, which tracks twice the daily return of SanDisk, and bought $9.67 million worth of the GraniteShares 2x Long Intel Daily ETF, which tracks twice the daily return of Intel.

Semiconductor stocks have since rebounded as earnings results from Amazon and Microsoft eased concerns about the memory chip market. The Philadelphia Semiconductor Index surged 8.19% on June 30, its biggest single-day gain since April 9, 2025, when it rose 17.16%.

On the same day, Micron and SanDisk jumped 18.4% and 26.0%, respectively. Applied Materials (15.0%), AMD (13.0%), Marvell Technology (12.2%), Intel (11.3%) and Nvidia (2.7%) also posted strong gains.

"Samsung Electronics' remarks that a memory chip shortage could persist through 2028, combined with confirmation from hyperscalers' earnings of their commitment to expanding AI infrastructure investment, provided reassurance," said An So-eun, an analyst at KB Securities.

Easing fears of a large-scale unwinding of AI-related positions — and a growing sense that deleveraging was nearing its end — also helped lift sentiment toward chip stocks. According to the Financial Times and other foreign media, hedge fund Situational Awareness, facing margin calls after a sharp drop in AI-related stocks, sold most of its roughly $16 billion in holdings to Citadel.

Wall Street remains broadly optimistic about the memory chip market. Goldman Sachs said in a recent report that a rise in commodity DRAM prices next year could drive a significant increase in HBM prices as well, and forecast that supply-favorable conditions in the industry would persist for an extended period.

On Chinese memory chip makers' capacity expansion, Goldman assessed that gaps in production yield, technology and product reliability remain, meaning the threat to incumbents would be limited in the near term.