EWY Becomes a Proxy for Korea’s AI Memory Boom

The iShares MSCI South Korea ETF (EWY) has surged over the past year, soaring roughly 140%. But beneath that eye-popping return is an extreme concentration story.

More than half of EWY’s gains came from just two stocks, Samsung Electronics and SK Hynix.

Of the fund’s total gain, Samsung contributed 47 percentage points, while SK Hynix added another 37 percentage points. Combined, the two stocks accounted for 84 percentage points of EWY’s return, or about 60% of the ETF’s total gain over the past year.

Both companies have rallied sharply on booming demand tied to artificial intelligence, driven in large part by their dominant positions in high-bandwidth memory (HBM) chips, a critical component for AI data centers and advanced computing systems.

Following the gains, Samsung now represents roughly 27% of EWY, while SK Hynix accounts for about 20%, meaning the two firms together make up nearly half of the fund’s portfolio.

As a result, EWY has increasingly become a de facto proxy for Korea’s memory-chip giants for U.S. investors. 

Embracing the Concentration

For now, investors seem to be embracing the concentration.

Samsung does not have a sponsored U.S. ADR, though thinly traded unsponsored OTC shares do exist. SK Hynix currently has no U.S. ADR at all, though the company is reportedly considering launching one as a way to help close the valuation gap with its American peer, Micron Technology.

With few direct avenues to own these stocks, investors appear to be gravitating toward EWY instead. The ETF has pulled in $3.8 billion of net inflows over the past year and now holds $12.3 billion in assets, underscoring how demand for Korea’s AI-linked semiconductor leaders is increasingly being expressed through a single, highly concentrated fund.