Can You Still Ride the Taiwan Memory Stock Wave? Hsieh Jin-He Lists 7 Firms' 'Moment of Doom' — Worst Drop Over 50%: 300,000 Accounts Liquidated

Taiwan's stock market experienced heightened volatility this week, leaving investors on a rollercoaster ride. On the 23rd, the weighted index continued to fluctuate, briefly surpassing the 45,000-point mark in early trading before closing up 25 points. Memory stocks remain one of the most prominent bullish sectors in the Taiwan market, with continued optimism surrounding the memory industry cycle in the second half of the year. However, recent sharp price increases have led to significantly higher trading volumes for companies like Nanya Technology, Winbond Electronics, and Macronix, amplifying sector volatility.

In response, Wealth & Trust Media Chairman Hsieh Jin-He published an analysis titled 'The Memory Sector's Moment of Doom! Seven Companies Decide the World's Fate!' on the 23rd, using South Korea's stock market 'disaster' as a case study. He emphasized that the fundamentals of the memory sector have not deteriorated — the real problems lie in leverage and market positioning, and the South Korean government has already learned its lesson.

On the 23rd, Taiwan's market saw extreme intraday swings of nearly 750 points. The index briefly reclaimed 45,000 points in the morning, but turned negative midday as TSMC (2330), the world's leading foundry, turned bearish and pressure emerged from large-cap tech and financial stocks. The index eventually closed in positive territory at 44,850.81 points, supported by TSMC narrowing its losses and buying interest returning to Hon Hai, financial stocks, and parts of the AI supply chain.

Memory stocks have benefited from continued expansion of HBM (High Bandwidth Memory) demand in AI servers, along with rising prices for DDR4, DDR5, and NAND Flash. However, since July, concerns have mounted after Chinese memory manufacturers warned of overvaluation in the industry, coupled with fears of profit-taking after strong gains, leading Nanya and Winbond to experience sharp declines of 5% to 8%.

Hsieh analyzed seven global memory companies (SK Hynix, Samsung, Kioxia, Micron, SNDK, STX, WDC) that drove global markets earlier this year but have since seen massive volatility. The root cause, he said, was South Korea's Financial Supervisory Service approving 16 ETFs offering 2x leverage on Samsung and SK Hynix stocks. These ETFs attracted 14 trillion won in a short period. Many South Korean investors, chasing quick profits, invested their entire savings. Within two months, 1.2 million young retail investors faced margin calls, and over 300,000 accounts were liquidated — a catastrophe for South Korea's capital markets and a major political burden for President Lee Jae-myung.

Hsieh recalled that the trend began with the 'Southern 2x Leveraged Hynix' ETF issued in Hong Kong, forcing the South Korean government to open the door to similar leveraged ETFs. As Samsung and Hynix surged, investors piled on more leverage — a clear sign of an impending disaster.

According to Hsieh, the fundamentals of memory remain intact, but 2x leverage amplified price swings. When the correction mechanism kicked in, young investors were wiped out en masse, turning global memory stocks into a disaster zone. The worst performer was Japan's Kioxia, down 53.76%, while even Samsung fell 35.91%. The declines across the seven firms were:

- Kioxia: down 53.76% - WDC: down 46.18% - SK Hynix: down 43.82% - SNDK: down 43.68% - STX: down 38.78% - Micron: down 35.95% - Samsung: down 35.91%

Comparatively, the South Korean market fell 31.5%, Japan's market dropped 13.9%, and Taiwan's market declined 12.96% (from 48,218 to 41,967 points). The Philadelphia Semiconductor Index was also hit hard, with 3x leveraged ETFs like SOXL and KORU in the U.S., and Hong Kong-listed Hynix and Samsung ETFs plunging 70–80%, wiping out all leveraged investors.

Hsieh concluded: 'Memory fundamentals haven't deteriorated. The problem lies in leverage and positioning. South Korea has learned its lesson. The worst is over, and the market is adjusting to a new order. Stocks without fundamental support but driven by excessive speculation will face backlash.'