Korean AI Chip Stocks Struggle to Rebound After Leveraged Wipeout

Excessive leverage triggered sharp drops in Korean AI semiconductor stocks, causing liquidations that hinder a quick return to previous highs.

Woofun AI notes that Ariel Hernandez highlighted a severe downturn in South Korean AI semiconductor stocks at the end of July. The decline resulted from excessive leverage, leading to brutal liquidations that prevent an immediate V-shaped recovery to levels seen weeks ago.

Hernandez compared this event to earlier silver market leverage liquidations, observing that such trends typically increase selling pressure and reduce new leveraged buying interest. Consequently, rapid reversals are unlikely, with previous highs potentially requiring months or years to regain.