Kioxia Stake Sale... Is It the First Warning of a Semiconductor Supercycle? / SK Hynix ADR Discrepancy… Investors' Dilemma | Lee Je-chung, Managing Director at CSOP Asset Management

Summary

Lee Je-chung discusses structural improvements in Korean market accessibility via omnibus accounts, the impact of ETFs on volatility, the SK Hynix ADR premium and arbitrage difficulties, the Kioxia stake sale and its implications, and TSMC's backend bottleneck. He sees foreign inflows and convergence trade opportunities in SK Hynix local shares.

• Omnibus accounts will improve foreign investor access and bring more long-term capital into Korean equities.
• ETF product proliferation is not the primary cause of market volatility; the main driver is the semiconductor sector's large price swings.
• SK Hynix ADR trades at a 25-35% premium over local shares, likely due to hedge fund long/short positioning.
• For Korean investors, buying local SK Hynix shares may be better than the ADR given tax and currency costs.
• Bain Capital's exit from Kioxia is a standard private equity divestment, not a cycle-top warning signal.
• TSMC's backend testing bottleneck is a mild negative for TSMC but confirms that overall semiconductor demand remains overwhelming.
• The speaker maintains a positive structural view on Korean equities and suggests monitoring potential convergence in SK Hynix.