AI storage chip lines continue to heat up, boosting South Korea 's storage lead SK Hercules stock prices and pushing the associated leverage ETF up to high. The multi-products of linking Hercules to Tristar electronics have increased dramatically this year, and the scale of funding has expanded simultaneously, but the risk of retreat in high volatility has also begun to gain attention.

Hercules-related products are expanding rapidly.

On 22 June, the market value of the SK Hercules Disk once exceeded the market value of Tristar electronics, rising to the top of the Korean stock market and increasing by 5.61 per cent that day. Previously, the company had provided 12 floor HBM4E samples to its core clients. These high-performance DRAMs, which are oriented towards the AI scene, are seen by the market as important catalysts for a new round of storage.

This led to an increase of 16.55 per cent on the same day in the South, twice as many as in the Hong Kong Stock Exchange, and a cumulative increase of 1061.92 per cent during the year. The product was listed in October 2025, with an initial size of about HK$ 24 million. As of 18 June, the scale had increased to $14.418 billion, an increase of about 21.7 times from $636 million at the end of last year.

Two times more than three-star electronic ETF in the South also showed a clear inflow. As of 18 June, the product had reached $4.4 billion in size, and had continued to grow by more than 50 per cent since June, following a significant increase in May.

AI needs to push up the plate heat

The market's pursuit of the memory chips is mainly due to AI reasoning and the rising demand for data centres. According to the institutional view, one of the core drivers of the current round ' s storage up-cycle is the growth in SSD storage demand as a result of AI ' s numerical expansion, and the industry landscape is still moving up.

However, in terms of the financial structure, this type of leverage ETF continues to be dominated by individual investor transactions. According to the institutions interviewed, long-term funds usually do not use leverage ETF as a core allocation tool, with a few hedge foundations using them for short-term transactions, but long-term funds such as pensions are generally absent.

High voltage down retreat will be magnified.

Monitoring data released by the Korea Financial Supervisory Authority on 18 June show that during the period from 27 May to 12 June, the largest withdrawal of three star electronic units was 18 per cent, more than double the maximum of ETFs 35.9 per cent; the largest withdrawal of SK Hercules units was 19.1 per cent and the corresponding leverage ETFs were expanded to 38 per cent.

The regulator suggested that the Korean stock had a 30 per cent increase or drop limit, and that, in extreme cases, double the leverage product would have a maximum loss of 60 per cent for the single day theory. This means that, once the plate is weak, the net volatility of the leverage product is significantly higher than the positive share.

Abnormal deviations expose liquidity problems

In early June, two consecutive trading days in the South Korean market, twice the leverage of SK Hercules, ETF, were clearly deviating from the positive market. On June 8th, the Helix stock fell by nearly 8%, while the ETF rose by nearly 50%; the next day, the positive share rebounded by more than 13%, while the ETF disk fell by 40%.

The product manager, Korea Investment Management, explained that the variation was related to insufficient market liquidity. There was no mandatory offer obligation for marketers at the bidding stage, and a large number of market purchase orders pushed up the Fund ' s price, creating a significant premium, which then fell quickly after the liquidity recovery.

The analysts also mentioned that the leverage ETF uses a daily replacement mechanism, which can lead to time loss in high volatility environments. Even if the price of the bottom equity returns to its previous high, the net value of the fund may not be repaired simultaneously. If the product continues to grow in size and is redeemed by concentration, the liquidity pressure may further magnify the decline.