Is This Crash Due to the AI Bubble? The Real Reason Is Something Else | Lee Seon-yeop, AFW Partners CEO

Summary

Lee Seon-yeop, CEO of AFW Partners, argues that the recent crash in Korean semiconductor stocks is not an AI bubble burst but a correction driven by technical factors such as quarter-end rebalancing, extreme leverage concentration, and the SK hynix ADR subscription. He presents data showing that AI hyper-scalers are still accelerating investment, memory supply remains extremely tight, and the long-term earnings uptrend is intact, making the pullback a buying opportunity for Korean memory chip leaders. He also warns against using leverage and advises investors to objectively reassess market fundamentals.

• Korean semiconductor sell-off was triggered by quarter-end rebalancing, leverage unwinding, and the SK hynix ADR listing, not by fundamental deterioration.
• AI capex continues to grow; Meta announced plans to double its computing capacity, and OpenAI reports that it cannot secure enough memory.
• Memory supply is extremely tight — only 50% of customer orders are being fulfilled, and industry players are adding capacity, disproving oversupply fears.
• Historical patterns for NVIDIA show that even when revenue growth rates temporarily dip, rising absolute earnings eventually drive stock prices to new highs.
• A US manufacturer of gas turbines and transformers is making record highs, confirming that AI infrastructure demand remains robust outside of Korea.
• Extreme leverage concentration (83% of KOSPI volume in semiconductor-related leveraged trades) is amplifying volatility and market dysfunction.
• Lee Seon-yeop advises against using leverage and encourages investors to objectively reexamine whether current fears are supported by actual data.