On August 8, the South Korean stock market has experienced significant adjustments since July 2026, with investors betting on the AI industry chain facing substantial losses. Some individual investors using leveraged ETFs and margin trading are under pressure from forced liquidations. Data shows that the Korea Composite Stock Price Index fell from a high of 9,385.59 points on June 19 to a low of 5,262.77 points on July 29, marking a decline of nearly 44% over a month. Leading semiconductor stocks have been heavily impacted, with SK Hynix's share price dropping from a peak of 2,987,000 KRW on June 25 to a low of 1,287,000 KRW on July 29, representing a maximum drawdown of about 57%; Samsung Electronics saw a maximum decline of over 49% during the same period. As the AI storage market heated up, many South Korean individual investors flocked to semiconductor stocks and leveraged ETFs. Some investors chased the rising prices of SK Hynix and Samsung Electronics through 2x leveraged products, but after the market reversal, the leverage effect amplified their losses. According to data from Shenwan Hongyuan, since the introduction of the 2x leveraged ETFs for individual stocks in South Korea on May 27, the scale of related leveraged funds rapidly increased, only to shrink significantly due to the adjustment in tech stocks, with product scales retracting by 71.6% from their peak. The balance of credit financing in South Korea has also fallen back to about 27 trillion KRW, returning to levels seen in early 2026. Market participants point out that when stock indices decline rapidly, if margin accounts hit the margin call line and investors cannot replenish funds, it triggers forced liquidations, further depressing stock prices and creating a negative feedback loop of 'decline—liquidation—continued decline.' Some investors have experienced a transition from doubling their profits to incurring massive losses. One investor who bet on SK Hynix through a 2x leveraged ETF saw their account's floating profit exceed 100%, but ultimately lost nearly 50% after the market reversal in July. Another South Korean investor, heavily invested in SK Hynix, reported losses exceeding 60%. Analysts believe that the current AI stock market trend in South Korea is driven not only by the semiconductor business cycle but also by high-leverage participation from individual investors amidst a nationwide stock trading frenzy. As the market cools, South Korean regulatory authorities have raised the investment threshold for leveraged ETFs to mitigate the risks of leveraged trading amplifying market volatility.