EWY: The Memory Tax on Every AI Chip

SK Hynix: The Toll Collector

Every Nvidia GPU that powers AI runs on a specific type of memory called HBM (High Bandwidth Memory). Not regular RAM. Not storage. A specialized, extremely fast memory that sits directly on the chip and feeds it data fast enough to keep up with the compute.

There is one company that dominates its production. SK Hynix, a South Korean chipmaker. They hold 62% of the global HBM market and supply the majority of Nvidia's most powerful chips. Every Blackwell GPU shipped in 2025 ran on their memory. Every Vera Rubin GPU shipping in 2026 will need even more of it: 288GB per chip versus 192GB on Blackwell.

SK Hynix sold out its entire 2026 HBM capacity before the year began.

The company posted a 58% operating margin last quarter. Full year profits doubled year-over-year. Parts of the market are still pricing it like a company that makes memory for laptops. That gap is the first part of the thesis.

Samsung: More Than a Catch-Up Story

Samsung is the foundry making Groq's LPU chips inside Nvidia's Rubin platform. They're in Tesla's AI4 and AI5 supply chain. They're finalizing an xAI chip deal at their Texas facility this year. And they're simultaneously pushing hard to close the gap on SK Hynix in HBM4. The market reads Samsung as a consumer electronics company. The actual exposure is something else entirely.

The Access Vehicle

$EWY is the iShares MSCI South Korea ETF. It holds both. SK Hynix and Samsung in a single position — you own the dominant HBM supplier and the foundry expanding across the AI supply chain simultaneously. For US investors who can't easily buy either name directly, it's the clearest access point to both sides of this trade.

The Risks

Samsung's HBM4 yield rates are the key variable. If they close the gap on SK Hynix, pricing power at SK Hynix compresses. EWY holds both sides of that outcome, which is either a hedge or a dilution depending on how it plays out.

The HBM3E to HBM4 transition creates a margin pressure window in the first half of 2026 as product mix shifts. Short-term earnings could disappoint even if the long thesis holds.

EWY also carries Korean won and broader macro exposure. It's not a clean single-stock position.

The bigger picture: AI capex across the top five cloud providers is tracking toward $660B in 2026. Every dollar of that runs through chips that need HBM. SK Hynix collects a toll on all of it. Samsung is positioned across multiple layers of the same buildout. EWY owns both.