Trends
Hedge funds bet on South Korean chipmakers for AI
Hedge funds are shifting their focus on the South Korean market, viewing them as the next sound investment.
Headline
Hedge funds are shifting their focus on the South Korean market, viewing them as the next sound investment.
Context
OUR TAKE South Korea will become the main battlefield in Asia for AI technology. With substantial investments from hedge funds and supportive policies from the South Korean government, the country’s long-underestimated tech sector is poised to reemerge as a key player in the fierce global competition, revitalising the market. –Ashley Wang, BTW reporter Hedge funds are increasingly investing in South Korea’s chipmakers, predicting that a surge in demand for high-end memory chips and supportive government policies will significantly boost their value. Leading investors, including Britain’s Man Group , Singapore’s FengHe Fund Management , and Hong Kong’s CloudAlpha Capital Management, are turning their attention to South Korean giants like SK Hynix and Samsung Electronics which have lagged behind the sector rally.
Evidence
Pending intelligence enrichment.
Analysis
Matt Hu, chief investment officer of FengHe, which has been buying Hynix and Samsung this year, pointed to Hynix’s potential in AI and compared it to Nvidia’s dominance. He estimates that Hynix gets a larger share of its revenue from Nvidia than TSMC, but that Hynix trades at 9 times forward earnings, compared with TSMC’s 23 times. This disparity presents huge investment opportunities. Adding to this positive momentum, the South Korean government has introduced a $19 billion support package for the chip industry, along with a “Corporate Value-up Programme” to enhance shareholder returns. These initiatives also contribute to significant hedge fund investments, propelling the benchmark KOSPI index to its best performance in seven months in June. Also read: SK Hynix will invest $75B in AI and chips by 2028 Also read: op 3 AI chip makers in 2024–who are they?
Key Points
- Hedge funds are shifting their focus on the South Korean market, viewing them as the next sound investment.
- The support from hedge funds and government policies has already brought notable feedback with the companies’ stocks showing an upward trend.
Actions
Pending intelligence enrichment.
