hedge fund is an association of investors who combine their investments into one pot, to obtain a higher profit. However, only accredited investors can partner into a hedge fund.
That means the company has to have a worth of 1 million pounds, excluding their properties, or an annual profit of 200.000 pounds.
Hedge funds chasing artificial intelligence-related bourse trades change their focus on South Korean chipmakers. Their move anticipates a large request for high-memory chips, which will be even more valuable in the context of government spending.
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These hedge funds include Britain's Man Group, Singapore's FengHe Fund Management, Hong Kong's CloudAlpha Capital Management, and East Eagle Asset Management. They are focusing on some of the big South Korean providers, such as SK Hynix and Samsung Electronics, which have delayed the sector’s gathering.
Matt Hu, the chief investment officer of FengHe, the company that bought Samsung and Hynix this year, claimed in a statement: “If we consider Nvidia the king of the AI story, then Hynix is the queen.”
FengHe and other hedge fund investors believe that the tremendous AI success that tripled the value of Nvidia last year (a US company with shares that value more than $3 trillion) left behind producers such as Hynix, focusing on more popular Asian AI competitors, such as Taiwan’s TSMC.
Even considering this context, the focus is on South Korean chip producers, as technology companies in the productive AI race hurry to secure the memory capacity (HBM) chips, which Hynix, Samsung, and the U.S.-based micro technology mostly produce.
Hynix remains the top provider of advanced HBM memory chips for Nvidia.FengHe’s Hu evaluates Hynix as receiving more income from Nvidia than TCMC does, even though Hynix trades at 9 times its 12-month further income against 23 times for TCMC.
Some other larger factors and events increase growth in these shares, such as the South Korean government's $19 billion help package for the chip market and its new “Corporate Value-Up Programme. The same scenario happens in China and Japan to return the capital to the shareholders.
Hedge funds say the big risk of investing in the South Korean market is overcome by its profit and benefits. Among these risks is the pressure of decreasing the Korean won and the limitation of short-trading shares in the regional market.
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