Foreign investors sold 22 trillion won of Samsung and SK hynix while Micron and TSMC rose about 12%

The profit-taking explanation works only inside Korea. Analysts cited by Seoul Economic Daily say selling to lock in gains was concentrated in the Korean large-cap chip stocks that had run up the most since January ^[18]. Samsung Electronics is up 103.89% this year and SK hynix 148.31% ^[8]. Micron is up 226.23%, which puts it 77.92 points ahead of SK hynix ^[8][15], and it still added 11.90% in the weeks when the Korean pair barely moved ^[2]. A global fund taking profits on its biggest memory winner had more reason to trim Micron than either Korean name.

Every won of the 22.1 trillion that foreigners sold went to a buyer who was not foreign ^[16]. Those buyers took the whole exit at roughly flat prices: Samsung finished the window up 0.77% and SK hynix up 0.43%, according to Korea Exchange data ^[1]. Over the same weeks Micron beat Samsung by 11.13 points ^[17].

The flow can be read three ways. One is a call against Korean listings. On that reading, money that still wanted memory exposure found it in Micron, or in TSMC's U.S. receipts, which rose 12.55% ^[3]. Another is churn. "Foreign investors appear to be repeatedly moving between leveraged and inverse ETFs and the underlying shares in pursuit of short-term gains," a securities industry official told the paper, which did not name the official ^[7]. If part of the 22.1 trillion won went into leveraged products, the ownership registers overstate how much exposure actually left. The third is the speculation, resurfacing since July, that the memory cycle has passed its peak ^[9]. Son In-jun, an analyst at Eugene Investment & Securities, disputes that premise. "The memory market is still stronger than the market expects, but it will take time to close the gap between market perception and actual conditions," he said ^[11].

The selling was lopsided. SK hynix took 15.9992 trillion won of it, or 72.3% ^[4][13]. Its foreign ownership fell 5.05 points, from this year's peak of 54.64% to 49.59% on Oct. 8, so foreign holders now own less than half the shares ^[5][14]. Samsung's smaller 6.1285 trillion won was enough to push its foreign ownership to 46.38%, the lowest since Jan. 11, 2008, during the global financial crisis ^[4][6].

We think the first reading fits best. Seoul Economic Daily calls heavy foreign selling the main constraint on the two stocks ^[19]. That selling ran through weeks in which Micron, Nvidia and Kioxia all rose ^[2][3], so a foreign exit from memory as a theme does not match the prices. The case against our view is the ETF churn. If the official is right, part of the net selling is a trade that comes back, and the ownership low says less about conviction than it seems to. Our view is wrong if foreign buying returns after Samsung's preliminary third-quarter operating profit of 107.4 trillion won ^[10] and the Korean pair still trails Micron. Son described the same test in terms of earnings. "The market's attention is now on how long these profits can last," he said ^[12].