South Korean stocks fell sharply on July 24, with SK Hynix dropping more than 8% and Samsung Electronics losing more than 7%.
Some analysts said the decline was tied to a recent bearish memory-chip report from Morgan Stanley, while others argued the note may not have been the direct trigger for the sell-off.
Shawn Kim flagged a possible turning point in the memory cycle
In a report published on July 21, Shawn Kim, Morgan Stanley’s head of Asia ex-Japan tech research, said the AI-driven upcycle in memory chips was nearing a turning point. He wrote that contract memory prices could peak in the fourth quarter and that the proportion of upward earnings revisions had fallen from 92% to 77%.
The report also said inventory held by NAND module makers had risen to about 13 weeks, close to the pandemic-era high of roughly 15 weeks. It also set out a trading view: if NAND turns down, investors should sell DRAM.
Morgan Stanley missed out on SK Hynix ADR underwriting role
At the same time, Morgan Stanley failed to make the list of joint lead underwriters for SK Hynix’s roughly $26.5 billion American depositary receipt listing. Bank of America, Citi, Goldman Sachs and JPMorgan were selected, leaving Morgan Stanley as the only top-tier investment bank not chosen.
Based on a 0.5% underwriting fee rate, the deal would generate about $130 million in total fees.
Questions grow over research independence and banking interests
Multiple investment banking sources said Morgan Stanley’s Seoul office had begun reflecting internally on whether its steady run of negative semiconductor research had affected its investment banking business.
Beyond the SK Hynix mandate, Morgan Stanley has recently been caught up in a SpaceX placement dispute and the sale process involving IGIS Asset Management in South Korea. Those episodes have brought renewed attention to the tension between the independence of research teams and the commercial interests of investment banking, while increasing reputational and business pressure on the firm in the Korean market.