KORU ETF Plunges 15% Overnight Amid Global Chip Selloff and China Competition Fears

The Direxion Daily South Korea Bull 3X Shares (KORU), a leveraged exchange-traded fund tracking 3x the daily performance of the MSCI Korea Index, plunged over 15% in the overnight session on Monday (July 28) due to a global chip selloff fueled by AI spending sustainability concerns. The KOSPI fell over 10% after being halted earlier in the day, driven by declines in Samsung Electronics and SK Hynix, which together comprise more than half of the index.

Reports that a Chinese state-backed company had begun manufacturing immersion DUV lithography machines intensified the chip rout, according to The Information. Additionally, ChangXin Memory Technologies' blockbuster debut on the Shanghai Stock Exchange bolstered concerns over rising global chip competition. According to CNBC, the 60-day correlation between the KOSPI and Nasdaq 100 reached approximately 0.50, the highest level since 2021, as Samsung and SK Hynix have become increasingly central to the AI memory chip supply chain.