More than one-fourth of credit loans in Korea’s stock market are concentrated in just two major semiconductor manufacturers’ stocks — Samsung Electronics and SK hynix.
Analysts say investors’ heavy reliance on borrowed money to buy shares in Korea’s chip giants has amplified volatility across the entire market, not just for the two stocks.
Investors held 3.64 trillion won ($2.73 billion) in outstanding credit loans for Samsung Electronics and 3.33 trillion won for SK hynix as of Thursday, market tracker FnGuide said Sunday.
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Together, the two stocks accounted for 6.97 trillion won in outstanding credit loans, or 27.2 percent of the 25.6 trillion won total across the Kospi and Kosdaq.
On the Kospi alone, Samsung Electronics and SK hynix accounted for 36.5 percent of the market’s 19.09 trillion won in outstanding credit loans.
Outstanding credit loans measure the money investors still owe brokerages for stock purchases and serve as a key gauge of debt-fueled stock trading in the market.
Korea’s stock market has had few precedents for such an outsize share of leveraged investment in just two companies.
The two chipmakers’ combined share of total credit loan balances was far smaller in recent years, at an average of 3.39 percent in 2020, 4.39 percent in 2021, 4.36 percent in 2022 and 2.71 percent in 2023. Their share of outstanding credit loans climbed to 5.37 percent in 2024 before reaching 6.73 percent in 2025.
But their combined share climbed into double digits late last year and surpassed 20 percent in May. Their combined share surged to 33.6 percent on Aug. 12 and averaged 22.35 percent from January through Thursday.
The rush to buy the two semiconductor heavyweights on credit appears to reflect two forces: a stock rally sparked by supercycle expectations and the sharp fluctuations that followed.
The Kospi surged 116.3 percent from the start of the year to its annual peak on June 22.
The gains were even more dramatic for Korea’s chip giants. Samsung Electronics shares jumped 194.8 percent during that stretch, compared to a staggering 348.4 percent rally for SK hynix.
Borrowed money can amplify gains in large-cap shares when prices rise, but it can accelerate losses when a downturn sets off successive waves of forced selling, analysts say.
Given their outsize influence on the Kospi, steep gains or losses in Samsung Electronics and SK hynix can amplify fluctuations across the entire market.
In the past, an increase in stock purchase loans did little to move the overall market. That has changed as investors have piled borrowed money into the chipmakers, who are two of the Kospi’s biggest constituents, according to Jang Geun-hyuk, a senior research fellow at the Korea Capital Markets Institute.
Outstanding credit loans in Korea’s stock market have recently fallen to around 25 trillion won, their lowest level this year.
The concentration of borrowed money in the two chip giants has eased since August, yet it remains far above levels seen in previous years.
The government has moved to slow forced stock sales by easing margin loan requirements. From last Monday through the end of January, securities firms are exempt from a rule that requires them to maintain collateral worth at least 140 percent of outstanding loans.
The Financial Supervisory Service urged nine major investment banks to tighten credit risk controls, including lending limits for individual stocks and borrowers, to prevent the regulatory relief from fueling more leveraged bets, during its meeting with the financial firms on Thursday.
