Foreigners buy up Samsung as Korean retail bets on Hynix with leverage

Lee Jae-yong acquittal lifts sentiment for Samsung; Hynix rally fuels surge in retail margin trading

The Samsung Electronics' Seocho office building in Seoul./News1

Foreign and retail investors are taking sharply diverging approaches in Korea’s semiconductor sector, with overseas funds accelerating purchases of Samsung Electronics while local retail traders turn to SK Hynix using margin loans, despite recent volatility.

According to Korea Exchange data, foreign investors purchased a net 1.877 trillion won ($1.3 billion) of Samsung Electronics shares as of July 18—more than twice their net buying in the previous month. The influx lifted their ownership stake to 50.19%, regaining the 50% threshold for the first time since April 24.

The buying coincided with the Supreme Court’s July 17 acquittal of Samsung Electronics Chairman Lee Jae-yong on charges related to a controversial merger and accounting violations. The verdict removed a long-standing legal overhang, boosting investor confidence that Samsung may now shift focus toward resolving operational headwinds, including underperformance in high-bandwidth memory (HBM) and deep losses in its foundry unit.

In contrast, foreign funds have turned net sellers of SK Hynix this month, unloading 301 billion won of shares and ending a two-month streak of net buying. The selling followed the stock’s brief surge past 300,000 won per share intraday on July 11—its first time crossing that level—before momentum faded. Goldman Sachs' recent downgrade to “neutral” added to pressure, triggering profit-taking.

Meanwhile, domestic retail investors have been buying heavily into SK Hynix, but with borrowed funds. So far in July, individuals bought a net 1.233 trillion won of Hynix shares, while selling 2.315 trillion won worth of Samsung stock. Margin balances on SK Hynix rose to 395.1 billion won as of July 17, a 30% increase from 305.2 billion won at the end of June.

Margin loan balances, which reflect leveraged retail positions, often swell when retail traders expect continued gains. The surge suggests concentrated optimism among individual investors despite signs of cooling momentum.

Yet analysts warn of potential headwinds ahead. Hanwha Investment & Securities cautioned in a recent note that expected changes in the HBM market structure by 2026 and rising DDR5 supply could weigh on conventional DRAM prices. “Short-term risks to SK Hynix shares remain elevated,” the report said, pointing to the possibility of further downside.