Part A
SK Square Co. (034730.KS) set an intraday record of ₩1,891,000 on June 19 before closing at ₩1,780,000, extending its June advance to 44.4% and leaving its underlying chip asset SK Hynix (000660.KS) — up a comparatively modest 18.5% on the month — trailing well behind.
The divergence stems from a structural quirk in Korea's Capital Markets Act: equity funds are barred from holding more than 10% of any single stock, and SK Hynix's AI-driven surge has pushed its weighting near or above that ceiling in many portfolios.
That cap, which the Korea Financial Investment Association (KFIA) recalibrates monthly based on market-capitalisation data, has created a lag between SK Hynix's actual weighting and the published reference figure. Institutions looking to add semiconductor exposure without breaching the limit have increasingly turned to SK Square, which owns a roughly 20% stake in SK Hynix — giving buyers indirect access to the chipmaker.
The result has been ₩1.9025 trillion in net institutional purchases of SK Square during June alone, lifting the holding company's market capitalisation to ₩234.9 trillion (approx. USD 153 billion) and vaulting it to third place on the KOSPI by market value, behind only Samsung Electronics and SK Hynix. Year-to-date, the stock has gained 414.5%, versus 324.6% for SK Hynix — a spread of roughly 90 percentage points.
The highest Street target on SK Square before the June rally stood at ₩1.87 million; that level was surpassed intraday on June 19, suggesting analyst estimates have not yet caught up with the market. The arbitrage case for SK Square is expected to persist as long as the gap between the KFIA-published SK Hynix weighting and its live market cap remains material.
Part B
The proxy trade is underpinned by SK Hynix's own fundamental momentum. The Icheon-based chipmaker projects free cash flow of ₩14.6 trillion in 2026 and ₩24 trillion in 2027, driven by a full-blown HBM supercycle. SK Hynix commands an estimated 60–70% of shipments destined for NVIDIA's next-generation Vera Rubin AI platform and has stated that its entire DRAM, HBM, and NAND supply through the end of 2026 is already committed to customers.
The Micron Technology (MU) earnings release scheduled for June 25 is the next key event for Korean semiconductor investors. Consensus expects Micron to report fiscal Q3 2026 revenue of roughly USD 35 billion. A beat — or a raise in forward guidance — would likely reinforce the AI memory narrative that has propelled SK Hynix and, by extension, SK Square to record territory.
For the moment, SK Square's premium over a simple net-asset-value calculation reflects not just the index-cap mechanics but also the market's bet that SK Hynix's capital-return programme — pegged to rising free-cash-flow projections — will sustain a re-rating for the broader SK semiconductor ecosystem.
Sources: Korea Herald, Bloomingbit, Seoul Economic Daily, MK Economy
