Hedge funds are showing interest in South Korean chipmakers, such as SK Hynix and Samsung Electronics, as they hunt for artificial intelligence (AI)-related investments. These chipmakers have lagged behind the AI sector's rally so far, but with the new wave of demand for high-end memory chips and increased government spending, hedge funds believe they will become more valuable. South Korean companies are important players in the generative AI race, as they manufacture high-bandwidth memory (HBM) chips that are crucial for technology firms.
The South Korean government's support package for the chip industry and efforts to improve shareholder returns are also contributing to the growing interest from hedge funds. While there are risks involved, such as a depreciating Korean won, hedge funds see the potential for higher returns as compared to other markets. Besides chipmakers, the AI theme is also expanding to other sectors in South Korea.
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A version of this story appeared in CNN Business’ Nightcap newsletter.
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