To The Moon

Memory-focused exchange-traded funds are continuing their downward trend, with notable declines in the Hong Kong market. Southern CSOP Leveraged 2x Hynix (07709) dropped 6.67% to HK$49.22, while Southern CSOP Leveraged 2x Samsung Electronics (07747) fell 2.4% to HK$80.48.

This movement comes as three major memory chip manufacturers—SK hynix, Samsung, and Kioxia—are set to release their latest quarterly earnings. Based on broker forecasts, SK hynix is expected to report an operating profit of approximately 64.09 trillion Korean won for the second quarter, marking a near-600% surge year-over-year, which would set a new historical record.

Samsung Electronics has already released preliminary results, showing an operating profit of 89.4 trillion Korean won for the second quarter. Despite this strong fundamental performance, the company's stock price has fallen more than 30% from its recent peak. Investors are now closely watching whether the upcoming earnings report can reignite market confidence.

Notably, Samsung Electronics and the SK Group have signed semiconductor deals worth a combined 950 billion US dollars with American companies. SK hynix will supply long-term memory chips valued at 750 billion US dollars, while Samsung Electronics will provide chips worth 200 billion US dollars to Broadcom. Kim Yong-beom, head of the Office of Policy Coordination under the Korean President, acknowledged that these orders include capacity from "fabs that have not yet been built." This implies that both Samsung and SK hynix must accelerate their capacity expansion efforts at an unprecedented pace over the coming years.