《Expert Opinion》Recently, global memory-related stocks have experienced a significant collective correction. The market focus has been on ChangXin Memory (ChangXin Technology, SH:688825) announcing progress in the new-generation 4F2 DRAM architecture and planning to launch related server DDR5 products by the end of this year. Following the news, South Korea's Samsung Electronics (KS.005930) and SK Hynix (KS.000660) saw their share prices sharply decline, while U.S.-based Micron Technology (US.MU) also came under pressure.
In my view, although ChangXin's technological claims have attracted attention, the company still faces multiple challenges such as yield rates, customer validation, and mass production scale. It still has a long way to go before it can truly threaten the leading positions of Samsung, Hynix, and Micron.
*Valuations and expectations already at elevated levels, rising interest rates increase borrowing costs*
From an objective and rational perspective, the recent sharp decline in memory stocks is largely due to profit-taking. Driven by demand for AI high-bandwidth memory (HBM), memory stocks have accumulated substantial gains over the past period, and valuations and expectations are already at relatively high levels. Any news about new competitors can easily trigger investors to lock in profits.
Even ChangXin Memory itself has seen its share price retreat. As of midday on October 15, its share price was around RMB 43.6 to 43.9, down approximately 4.5% to 5% from the previous day's close, with its market capitalization briefly falling below RMB 3 trillion. Since early October, the stock has been continuously retreating from its peak range of RMB 55 to 61, indicating that even with the company's announcement of technological progress, it cannot remain immune. The overall market sentiment for profit-taking in the memory sector has affected even China's domestic leader.
Apart from ChangXin's news, the memory industry has recently faced other negative factors. The U.S. September Consumer Price Index rose more than expected year-on-year, prompting the market to reassess the Federal Reserve's likelihood of maintaining higher interest rates. Even if the Fed stays on hold in October, a rate hike in December is now almost certain.
AI data center construction involves substantial capital expenditure, and operators and cloud service providers are highly dependent on debt financing. Rising interest rates directly increase borrowing costs, squeezing expected investment returns, leading investors to question the long-term growth rate of HBM and server memory demand. Even though short-term memory supply and demand remain tight, tightening financing conditions are sufficient to trigger profit-taking at elevated levels. Some reports even suggest SK Hynix may delay some HBM4 equipment orders, and high memory prices have already caused a significant decline in smartphone and PC shipments. Investors are now beginning to worry early about the risk of supply-demand reversal after capacity expansion in 2027 to 2028.
The Philadelphia Semiconductor Index (SOX) has also seen a significant pullback during the same period. Semiconductor stocks have historically high volatility, and a pullback of up to 20% is not uncommon. Reviewing past cycles, the Philadelphia Semiconductor Index often experiences double-digit or even deeper technical corrections after strong rallies. In contrast, the broader U.S. stock market, measured by the S&P 500 Index, remains very close to historical highs, indicating that capital has not fully withdrawn from risk assets but is rotating between sectors and taking profits.
*SK Hynix's sharp plunge becomes a focus, risks of 2x leveraged products cannot be ignored*
Yesterday, South Korea's SK Hynix share price continued to plummet, with a single-day drop exceeding 10%, becoming a focal point in the Asian market. Over the past week, SK Hynix has accumulated a significant decline, falling notably from its highs months ago. However, the underlying stock has not yet broken below its lower levels from several months ago, indicating some fundamental support remains. In contrast, the 2x leveraged product tracking SK Hynix listed in Hong Kong (CSOP SK Hynix Daily Leverage (2x) Product, 07709) has performed absolutely惨烈 recently and has already broken below its previous multi-month lows.
This aligns with warnings I have repeatedly made in newspaper columns over the past few months. The risk of 2x leveraged products is actually a rather simple mathematical principle, but many investors tend to overlook it, mistakenly believing they can be held long-term. These products are designed to deliver twice the daily return of the underlying stock, not for holding beyond one day. After daily leverage reset, if the market experiences volatile movements, the cumulative return will deviate from twice that of the underlying stock due to volatility decay. For example, if the underlying stock rises 10% on Day 1, the 2x product rises 20%; on Day 2, if the underlying stock falls about 9.1%, returning to its original price, the 2x product falls about 18.2%, resulting in a cumulative loss.
If the underlying asset price remains in a volatile state, investors may find themselves losing even when directionally correct, and losing more when wrong. Believing that 2x leveraged products can be held long-term is absolutely a wrong investment concept.
Shareholder dynamics are also worth noting. SK Square (KS.402340), an intermediate holding company of the SK Group, holds about 20% of SK Hynix. According to Daishin Securities data, the National Pension Service of Korea has sold approximately 13.5 trillion Korean won of SK Square shares since July; during the same period, the fund has net purchased about 16.0 trillion Korean won of SK Hynix underlying shares. This reflects that some institutions are reducing holdings at the holding company level while directly increasing stakes in the operating company. Additionally, SK Group Chairman Chey Tae-won plans to sell part of his stake in the parent company SK Inc (KS.034730) (about 2.26%) to raise funds for divorce settlements, with some shares already sold to funds related to the Dell family office. Although this is not a direct reduction in SK Hynix itself, equity changes at the group level may still affect market sentiment. Meanwhile, the large-scale share buyback programs of Samsung Electronics and SK Hynix, totaling about 55 trillion Korean won, are nearing completion or ending early, removing key buying support from the market, and foreign investors continue to net sell Hynix shares.
Currently, the 2x leveraged product (07709) has broken below its multi-month lows, contrasting with the underlying stock still holding support levels.Leveraged products are suitable for investors with clear short-term strategies and strict control over holding periods, and are absolutely not tools for trading time for returns.
In summary, the global memory stock correction is driven not only by the ChangXin news catalyst but also reflects multiple factors including profit-taking at elevated levels, rising financing costs, and changes in shareholder capital flows.
The pullback in the Philadelphia Semiconductor Index is not uncommon historically, and the broader U.S. market remains close to highs, indicating risk appetite has not fully reversed. For 2x leveraged products tracking individual stocks, investors must fully recognize their structural risks and avoid operating with a long-term mindset. Market volatility is inevitable; clearly understanding product characteristics and strictly executing risk management is the foundation for sustained market participation.《Wong Tak Kei, Executive Director of Research Department at Everbull Securities, Chief Senior Instructor of Positive Education Securities Investment Analysis Course, Council Member of Securities Dealers Association, Council Member of Hong Kong Securities Analysts Association》
*Articles published in 《ETNet》, whether signed or unsigned, represent the authors' personal opinions and do not reflect the stance of 《ETNet》. The role of 《ETNet》 is to provide a free platform for expression.
In my view, although ChangXin's technological claims have attracted attention, the company still faces multiple challenges such as yield rates, customer validation, and mass production scale. It still has a long way to go before it can truly threaten the leading positions of Samsung, Hynix, and Micron.
*Valuations and expectations already at elevated levels, rising interest rates increase borrowing costs*
From an objective and rational perspective, the recent sharp decline in memory stocks is largely due to profit-taking. Driven by demand for AI high-bandwidth memory (HBM), memory stocks have accumulated substantial gains over the past period, and valuations and expectations are already at relatively high levels. Any news about new competitors can easily trigger investors to lock in profits.
Even ChangXin Memory itself has seen its share price retreat. As of midday on October 15, its share price was around RMB 43.6 to 43.9, down approximately 4.5% to 5% from the previous day's close, with its market capitalization briefly falling below RMB 3 trillion. Since early October, the stock has been continuously retreating from its peak range of RMB 55 to 61, indicating that even with the company's announcement of technological progress, it cannot remain immune. The overall market sentiment for profit-taking in the memory sector has affected even China's domestic leader.
Apart from ChangXin's news, the memory industry has recently faced other negative factors. The U.S. September Consumer Price Index rose more than expected year-on-year, prompting the market to reassess the Federal Reserve's likelihood of maintaining higher interest rates. Even if the Fed stays on hold in October, a rate hike in December is now almost certain.
AI data center construction involves substantial capital expenditure, and operators and cloud service providers are highly dependent on debt financing. Rising interest rates directly increase borrowing costs, squeezing expected investment returns, leading investors to question the long-term growth rate of HBM and server memory demand. Even though short-term memory supply and demand remain tight, tightening financing conditions are sufficient to trigger profit-taking at elevated levels. Some reports even suggest SK Hynix may delay some HBM4 equipment orders, and high memory prices have already caused a significant decline in smartphone and PC shipments. Investors are now beginning to worry early about the risk of supply-demand reversal after capacity expansion in 2027 to 2028.
The Philadelphia Semiconductor Index (SOX) has also seen a significant pullback during the same period. Semiconductor stocks have historically high volatility, and a pullback of up to 20% is not uncommon. Reviewing past cycles, the Philadelphia Semiconductor Index often experiences double-digit or even deeper technical corrections after strong rallies. In contrast, the broader U.S. stock market, measured by the S&P 500 Index, remains very close to historical highs, indicating that capital has not fully withdrawn from risk assets but is rotating between sectors and taking profits.
*SK Hynix's sharp plunge becomes a focus, risks of 2x leveraged products cannot be ignored*
Yesterday, South Korea's SK Hynix share price continued to plummet, with a single-day drop exceeding 10%, becoming a focal point in the Asian market. Over the past week, SK Hynix has accumulated a significant decline, falling notably from its highs months ago. However, the underlying stock has not yet broken below its lower levels from several months ago, indicating some fundamental support remains. In contrast, the 2x leveraged product tracking SK Hynix listed in Hong Kong (CSOP SK Hynix Daily Leverage (2x) Product, 07709) has performed absolutely惨烈 recently and has already broken below its previous multi-month lows.
This aligns with warnings I have repeatedly made in newspaper columns over the past few months. The risk of 2x leveraged products is actually a rather simple mathematical principle, but many investors tend to overlook it, mistakenly believing they can be held long-term. These products are designed to deliver twice the daily return of the underlying stock, not for holding beyond one day. After daily leverage reset, if the market experiences volatile movements, the cumulative return will deviate from twice that of the underlying stock due to volatility decay. For example, if the underlying stock rises 10% on Day 1, the 2x product rises 20%; on Day 2, if the underlying stock falls about 9.1%, returning to its original price, the 2x product falls about 18.2%, resulting in a cumulative loss.
If the underlying asset price remains in a volatile state, investors may find themselves losing even when directionally correct, and losing more when wrong. Believing that 2x leveraged products can be held long-term is absolutely a wrong investment concept.
Shareholder dynamics are also worth noting. SK Square (KS.402340), an intermediate holding company of the SK Group, holds about 20% of SK Hynix. According to Daishin Securities data, the National Pension Service of Korea has sold approximately 13.5 trillion Korean won of SK Square shares since July; during the same period, the fund has net purchased about 16.0 trillion Korean won of SK Hynix underlying shares. This reflects that some institutions are reducing holdings at the holding company level while directly increasing stakes in the operating company. Additionally, SK Group Chairman Chey Tae-won plans to sell part of his stake in the parent company SK Inc (KS.034730) (about 2.26%) to raise funds for divorce settlements, with some shares already sold to funds related to the Dell family office. Although this is not a direct reduction in SK Hynix itself, equity changes at the group level may still affect market sentiment. Meanwhile, the large-scale share buyback programs of Samsung Electronics and SK Hynix, totaling about 55 trillion Korean won, are nearing completion or ending early, removing key buying support from the market, and foreign investors continue to net sell Hynix shares.
Currently, the 2x leveraged product (07709) has broken below its multi-month lows, contrasting with the underlying stock still holding support levels.Leveraged products are suitable for investors with clear short-term strategies and strict control over holding periods, and are absolutely not tools for trading time for returns.
In summary, the global memory stock correction is driven not only by the ChangXin news catalyst but also reflects multiple factors including profit-taking at elevated levels, rising financing costs, and changes in shareholder capital flows.
The pullback in the Philadelphia Semiconductor Index is not uncommon historically, and the broader U.S. market remains close to highs, indicating risk appetite has not fully reversed. For 2x leveraged products tracking individual stocks, investors must fully recognize their structural risks and avoid operating with a long-term mindset. Market volatility is inevitable; clearly understanding product characteristics and strictly executing risk management is the foundation for sustained market participation.《Wong Tak Kei, Executive Director of Research Department at Everbull Securities, Chief Senior Instructor of Positive Education Securities Investment Analysis Course, Council Member of Securities Dealers Association, Council Member of Hong Kong Securities Analysts Association》
*Articles published in 《ETNet》, whether signed or unsigned, represent the authors' personal opinions and do not reflect the stance of 《ETNet》. The role of 《ETNet》 is to provide a free platform for expression.
