Samsung Electronics Posts Record Profit, Yet Kospi Plunges 6% as ETF-Leverage Sell-off Domino Takes Hold

Research firm SemiAnalysis reported that Nvidia's next-generation AI server rack, Kyber, could face roughly a year-long delay due to PCB substrate defects. The report triggered sharp declines in substrate makers such as Murata and Samsung Electro-Mechanics, with the latter falling more than 10% again. Nvidia denied any delay, and its shares closed slightly higher, suggesting the market's reaction had been overdone.

Large-cap semiconductor names already account for more than half of the Kospi's market capitalization, and that share rises to 64% when the so-called "Sensitive 7" stocks are included. Against this concentrated backdrop, leveraged ETF net assets have surged 82% globally from a year earlier, structurally amplifying index volatility. Leveraged products mechanically buy more as the underlying rises and sell more as it falls, creating a self-reinforcing loop of buying-feeds-buying and selling-feeds-selling.

Under this structure, a decline in one large-cap name can cascade into selling of semiconductor index ETFs, then spread to other large caps and overseas-listed related products. This chain reaction is being cited as the reason sidecar and circuit-breaker halts have been triggered multiple times in a single month — an unusual frequency, given that circuit breakers are typically reserved for once-in-years, crisis-level events.

Analysts stressed that earnings fundamentals and this flow-driven selling are separate issues. While chip earnings themselves are a matter of clear fact, uncertainty over whether hyperscalers will sustain capital spending continues to weigh on investor sentiment. Reports that the U.S. Treasury is internally discussing AI bubble risks compounded the unease, dragging down semiconductor-related stocks worldwide.

Amid ongoing debate over whether the memory chip cycle has peaked, research firm SemiAnalysis pushed back on claims that Meta is slowing data center and computing investment, arguing the pace will actually accelerate and that the recent selloff in related names was overdone. It noted that Meta's added capacity is largely being sourced through third parties such as CoreWeave and Nebius, positioning those firms for monetization gains.

SemiAnalysis also pointed to continued frontier-model training at Meta Superintelligence Labs, the expansion of Meta's ad recommendation system, and its cloud agreement with Anthropic as evidence that capex commitment remains intact. Anthropic's own data-center lease deal with TeraWulf and plan to acquire 1.4 gigawatts of data-center capacity in Australia were read as signs of resilient AI infrastructure demand.

Still, a clear tug-of-war over flows emerged between chips and hyperscalers. Semiconductors, strong early in the session, gave back gains as the day progressed, while security and software names such as Oracle, Palantir, CrowdStrike and Palo Alto Networks continued setting fresh highs.

JPMorgan reiterated a preference for chips over hyperscalers, calling the pullback a buying opportunity, while UBS, Citigroup and Bank of America all raised their DRAM outlooks. Micron and SanDisk, however, failed to recover the prior session's losses, suggesting sentiment has not fully healed.