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The Bank of Korea has warned that leveraged exposure tied to Samsung Electronics and SK Hynix could amplify market volatility amid South Korea’s AI-driven semiconductor rally.
The central bank said leveraged exposure to Korean stocks has expanded both domestically and overseas, creating channels through which moves in foreign-listed products can feed back into Seoul markets.
Overseas Samsung and SK Hynix ETFs Rise More Than 20-Fold
The value of Hong Kong-listed exchange-traded funds linked to Samsung and SK Hynix increased more than 20-fold during the first half of 2026, the Bank of Korea said in its September monetary policy report.
The central bank warned that leveraged products can require rapid portfolio adjustments when underlying shares move, potentially amplifying buying during rallies and selling during declines.
South Korean authorities have also tightened rules around single-stock leveraged ETFs following market volatility earlier this year, including measures aimed at reducing retail exposure.
Samsung and SK Hynix Account for About Half of Kospi Market Value
Samsung and SK Hynix together account for roughly half of the Kospi’s market capitalization, leaving the benchmark heavily exposed to movements in the two semiconductor companies. From January through June, the companies generated about 77% of the Kospi’s gains, according to the Bank of Korea.
When the index moved from around 8,000 points to above 9,000, their contribution to market fluctuations rose to about 99%. The central bank said that concentration increases the potential for leveraged products linked to the two companies to amplify wider index movements.
Bank of Korea Calls for Closer Oversight of Leveraged Products
The Bank of Korea said the expansion of leveraged investing warrants closer supervision because products listed overseas can transmit market shocks back into South Korea even when domestic rules are tightened.
The warning follows sharp swings in Korean equities after AI-linked semiconductor stocks reversed part of their earlier rally. The central bank is also monitoring interest-rate and foreign-exchange volatility as additional sources of market stress.
Its September report identifies concentrated semiconductor exposure and the growing use of leveraged products as risks requiring continued monitoring.
