Hedge funds hunting for artificial intelligence-related stock market bargains are rushing into South Korea's chipmakers, betting a new wave of demand for...
HONG KONG - Hedge funds hunting for artificial intelligence-related stock market bargains are rushing into South Korea 's chipmakers, betting a new wave of demand for high-end memory chips and government spending makes them more valuable.
But the spotlight is turning to South Korean chipmakers as technology firms in the generative AI race scurry to secure high-bandwidth memory chips manufactured primarily by Hynix, Samsung and U.S.-based Micron Technology. The rush of hedge fund cash into South Korea's AI sector helped the benchmark KOSPI index register its best month in seven months in June. South Korean stocks attracted the strongest inflows among Asia emerging markets so far this year, and their biggest inflows since 2008, according to LSEG data.The rewards of being invested in South Korea outweigh the big risks, hedge funds say, namely pressure from a depreciating Korean won and restrictions on short-selling of shares in the local market.
Sumant Wahi, a portfolio manager at Man Group focusing on technology stocks, expects prices of traditional Dynamic Random Access Memory chips to rise too because the chip industry has shifted too much capacity to manufacturing HBM.Pierre Hoebrechts, head of macro research at East Eagle Asset Management, expects Samsung to catch up in the second half due to its significant underperformance compared to TSMC this year.
The long-running Sino-U.S. technology war also ensures China keeps using South Korea's advanced memory chips, given Chinese chipmakers have so far been unable to compete while under U.S. export bans, Woo added.
Samsung Electronics East Eagle Asset Management Memory Chips Hedge Funds SK Hynix Fenghe Fund Management TSMC HBM Nvidia
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