Walking through South Korea, roughly one in every five adults you encounter could be a shareholder of Samsung Electronics. As of the end of June this year, the number of minority shareholders of Samsung Electronics – those holding less than 1% of the company's issued shares – had reached 7.971 million, a record high. South Korea’s adult population is only about 43 million. At the end of last year, Samsung had just 4.196 million minority shareholders; in half a year, the shareholder list nearly doubled.
At least in the first half of this year, betting on Samsung was almost a sure win. In the second quarter, Samsung Electronics posted an operating profit of 89.5 trillion won (about $60 billion), and in quarterly operating profit it even surpassed Nvidia’s $53.5 billion for the quarter ended April. A few days before the earnings guidance was released, South Korean media also reported that Kim Yong-gwan, head of Samsung’s semiconductor division, had declared at an internal meeting: Samsung’s semiconductor profit for this single year would exceed the cumulative profit of the past 40 years combined.
However, just as Samsung’s shareholder count hit an all-time high, the South Korean stock market turned downward. As of July 13, more than 1.2 million Korean retail leveraged trading accounts triggered margin calls, and about 320,000 to 360,000 of those accounts were fully liquidated. This round of South Korea’s plunge was accompanied by a sharp correction in semiconductor stocks and a deleveraging of leveraged trades. The KOSPI had already fallen more than 20% from its end-of-June record high by July 8.
The more money Samsung made, the more Koreans flooded in; and when the market turned, more and more people were swept in together. Koreans are being "trapped" by Samsung.
1.
On June 23, the South Korean stock market suddenly slammed on the brakes. That day, the KOSPI plunged 9.99%, its biggest single-day drop in more than three months. Samsung Electronics and SK Hynix both fell more than 12%, and the entire market triggered a 20-minute trading halt. Just the day before, the KOSPI had stood at a record high of 9,114 points.
Let’s imagine a young Korean man named "Min-jun." Six months ago, Min-jun still had some savings; in the blink of an eye, he became penniless – and even fell into debt. It is hard for Min-jun not to reflect on what exactly he had done during this period. He feels he simply made the same choice many Koreans would make – so how could he have ended up in such a predicament?
Just a few months earlier, when he opened his stock trading app, he could still see Samsung hitting new highs again and again: Samsung’s stock had already rallied last year. This year, the explosive demand for AI memory chips continued, and Samsung’s profits and share price surged together. In May, Samsung’s market capitalization exceeded $1 trillion for the first time; on May 27, the stock price hit another new high; in early June, Samsung could still rise 10% in a single day.
Buying Samsung was almost a decision that required no deep thought for Min-jun. He soon tasted the sweet rewards. The numbers in his account kept rising, and more and more people around him were talking about stocks. He began to believe this might be a once-in-a-lifetime "golden age." Watching the stock climb, Min-jun chose to add to his position. He started to fantasize that he really could make in a few months what would have taken years to save in the past – and the Korean market handed him a pillow.
On May 27, South Korea for the first time permitted the listing of single-stock leveraged ETFs linked to Samsung Electronics and SK Hynix. Ordinary people did not need to design complex financing strategies themselves; by simply buying one product, they could obtain nearly double the daily return of Samsung. The product went viral as soon as it launched. Buyers had to complete training first; on the first day of launch, the website of the Korea Financial Investment Association even crashed under the load, and more than 350,000 people completed the course in a short time.
Min-jun trusted his experience. He could see that Samsung was making record profits, that AI was still devouring more chips, and that the entire KOSPI was rising. Over the past year and a half, as long as you kept buying in, it seemed you could always make money. Some said he was too aggressive, but Min-jun thought that was called boldness – and everyone was doing it. As of June 10, Korean retail investors had invested 79 trillion won in the KOSPI this year; over the same period, foreign investors sold 124 trillion won. Retail borrowing for KOSPI investment reached a record 29 trillion won, up 71% from 17 trillion at the end of 2025. Meanwhile, the head of the Korea Capital Market Institute said that brokerages’ credit facilities had already hit regulatory limits.
Min-jun put part of his savings into Samsung, borrowed more to add positions, and also put some money into the double-leverage ETF. He figured that in a rising market, this strategy was nearly perfect. Samsung goes up, he makes money; leverage allowed him to control a larger position with the same amount of his own capital; and the double-leverage ETF amplified daily swings even further. After a continuous rally, Min-jun even felt that his only mistake was probably not buying enough. He could vaguely smell success and felt he was about to reap a big reward.
Then came June 23, when Samsung fell more than 12% in one day. The numbers in his ordinary account began to shrink first, and the double-leverage product dropped even more sharply. Even more brutal – the borrowed money would not shrink at all. Min-jun’s margin account soon flashed red, and his phone was flooded with margin-call text messages. Can’t come up with the money? The brokerage would not hesitate; it would liquidate his positions for him directly. It was only when he received the forced liquidation notice that Min-jun truly woke up. The leveraged ETF had shrunk drastically, his principal was worn thinner and thinner, and the money borrowed from the bank was still there, waiting for him to pay it back month by month.
The good news is that "Min-jun" does not exist. He is a fictional character we created to make it easier to understand – we crammed into him almost all the pitfalls that Korean retail investors might have stepped into over these six months. The bad news is that every pitfall he stepped into is real. According to Reuters, citing data from the Korea Financial Investment Association, as of June 24, the margin balance in the Korean stock market had reached a record 38.63 trillion won; if other forms of investment borrowing are included, investor debt had already exceeded 60 trillion won by the end of May. Separately, Goldman Sachs estimated that as of July 13, more than 1.2 million Korean retail leveraged trading accounts triggered margin calls, of which about 320,000 to 360,000 accounts were fully liquidated.
We could certainly attribute "Min-jun’s" tragedy to greed, recklessness, or ignorance of leverage. But when millions of people make similar choices at the same time, the question changes: Why are Koreans so willing to trust Samsung? Why does a single company’s stock rally make millions feel they cannot afford to miss out, even to the point of putting their savings and borrowed money together into it? The answer may trace back to a time before "Min-jun" was even born.
2.
Koreans face three inescapable things in life: death, taxes, and Samsung – this quip had already been written into a Reuters report as early as 2007, which explained at the time that the Samsung Group covered almost every aspect of a Korean’s daily needs. A Korean wakes up in an apartment built with Samsung’s involvement, turns on a Samsung TV, picks up a Samsung phone and goes to work; his insurance may come from Samsung Life, his credit card from Samsung Card, and if he gets sick, he may even walk into Samsung Medical Center. When he turns on financial news, among the most important export companies, stock market heavyweights, and manufacturing giants in South Korea, Samsung still ranks at the most prominent position.
In 1938, Lee Byung-chul founded Samsung in Daegu, initially as a food trading business selling dried fish, vegetables, and noodles. Samsung’s first transformation was from "selling things others produced" to "producing what Korea lacked." After the Korean War, the country was in ruins, and even sugar and textiles were heavily reliant on imports. In 1953, Lee founded Cheil Sugar and began producing sugar; in 1954, he established Cheil Wool Textiles, entering textile manufacturing. Later, Samsung continued to expand into insurance and other industries, growing from a trading firm into a conglomerate spanning manufacturing and finance.
What truly changed Samsung’s fate was South Korea’s industrialization starting in the 1960s. In 1962, South Korea launched its first five-year economic development plan. With extreme shortages of capital and technology, the government chose an export-oriented development path, using policy-based financing, foreign exchange, preferential import equipment treatment, and infrastructure investment to concentrate resources in enterprises capable of expanding production and exports. Research by the Korea Development Institute shows that the South Korean government consistently implemented strong export promotion policies after 1962; between 1960 and 1973, exports grew from $33 million to $3.225 billion. The OECD later summarised this period of Korean development as a "chaebol-led industrialisation strategy," with Samsung’s Lee Byung-chul and Hyundai’s Chung Ju-yung being the most typical entrepreneurs.
The government tilted credit, foreign exchange, and policy resources toward large enterprises that could expand production and exports, while chaebols like Samsung and Hyundai expanded rapidly along the industrial directions set by the state. From then on, almost every major pivot by Samsung corresponded to the next industry that Korea wanted to develop. In the 1960s, Korea began upgrading from light-industry exports to electronics manufacturing. In 1969, Samsung Electronics was established; the following year it began producing black-and-white televisions, and in 1971 it started exporting them overseas. Refrigerators, washing machines, and air conditioners were subsequently added to the product line.
In the 1970s, Korea felt that selling just clothing and televisions was not enough. In 1973, the Park Chung-hee government formally launched the heavy and chemical industrialisation strategy, designating steel, chemicals, non-ferrous metals, machinery, shipbuilding, and electronics as six key industries. Through low-interest credit, industrial parks, and policy support, the state channeled huge amounts of capital into these asset-heavy industries. In 1974, Samsung Heavy Industries was established, entering machinery and shipbuilding. That same year, Lee Kun-hee, against his father Lee Byung-chul’s opposition, used personal funds to buy a 50% stake in Korea Semiconductor, marking Samsung’s first step into the chip industry.
The direction of Samsung’s expansion increasingly aligned with Korea’s chosen industrial path: as Korea wanted to expand electronics exports, Samsung began making televisions; as Korea bet on shipbuilding and machinery, Samsung entered heavy industry. By the 1980s, this alignment entered a new phase. In 1983, Lee Byung-chul made what later became known as the "Tokyo Declaration" – Samsung would formally make a major push into memory semiconductors. Samsung immediately launched its VLSI business, built the Giheung campus, and developed 64Kb DRAM that same year. Unlike shipbuilding and machinery, semiconductors required not only enormous investment and much higher technological barriers, but Japanese firms already held a clear advantage at the time – it was an extremely high-stakes gamble for Samsung. Interestingly, just as Samsung chose to gamble on semiconductors, Korea was also searching for its next pathway to move from heavy and chemical industries toward technology-intensive manufacturing.
The more successful Samsung became, the tighter it was bound to Korea. By the 2000s, Samsung was already one of the world’s largest memory chip, display, and consumer electronics companies. By 2007, Samsung Group’s sales were equivalent to about one-sixth of South Korea’s GDP, while contributing about one-fifth of national exports, and its market capitalisation accounted for about one-fifth of the Korean stock market. Reuters directly wrote: "Welcome to the Republic of Samsung."
For "Min-jun," Samsung was not a company that suddenly became popular because of AI later on; it had always been there. Before he was born, Samsung had already gone through the entire process with Korea – from poverty, industrialisation, to becoming an export powerhouse. His parents’ generation watched it make televisions, build ships, and manufacture chips; he himself grew up surrounded by Galaxy phones, Samsung Insurance, Samsung Construction, and a vast supply chain. South Korea spent decades making Samsung a part of the nation’s success. By the time the AI boom of 2026 pushed Samsung to new heights once again, it was not hard to understand why millions would entrust their money to it.
3.
If we look only at this round of AI-driven rally in 2026, the first to enjoy the dividends was not Samsung but SK Hynix. Riding on its leading position in HBM (High Bandwidth Memory) within Nvidia’s AI chip supply chain, SK Hynix had been soaring since last year. On May 27, its market cap exceeded $1 trillion for the first time; on June 22, it even surpassed Samsung Electronics in market capitalisation for the first time, becoming South Korea’s largest listed company. That day, SK Hynix’s market cap reached 2,080 trillion won, while Samsung was about 2,067 trillion won – this was also the first time since 2000 that Samsung had lost the No.1 spot on the KOSPI by market cap.
However, the very next day, SK Hynix fell more than 12% along with Samsung. Over the following month, Korean semiconductor stocks continued their sharp correction. By July 29, when SK Hynix reported its second-quarter earnings, although operating profit surged 557% year-on-year, it still fell short of market expectations, and the stock fell another 9.6% that day. SK Hynix’s closing price dropped from 2.917 million won in late June to 1.401 million won, losing more than half its value.
The leverage "Min-jun" applied to his own account was financial leverage, but the real lever that moved the entire market was AI – a much bigger one. It first amplified semiconductor companies’ profits, then their stock prices; rising stock prices attracted more shareholders. With more participants, the market gave ever higher valuations, and expectations for the next earnings report were constantly raised. When investors began pricing SK Hynix based on even higher HBM prices, larger AI capital expenditures, and faster profit growth, even a 557% increase became "below expectations."
SK Hynix demonstrated how high AI could lift a chip company. When it came to Samsung, this amplification collided directly with a decades-long national-corporate relationship. As of the end of June this year, the number of minority shareholders in SK Hynix had exploded from 1.186 million at end-2025 to 3.462 million, adding more than 2.27 million people in half a year – a staggering pace – but Samsung had 7.971 million minority shareholders. In this same AI boom, Samsung added about 3.77 million minority shareholders, and the shares held by minority shareholders even accounted for 66.24% of Samsung Electronics’ total issued shares.
In January this year, South Korean media began using an unflattering term for those who failed to get on board in time: "lightning poor." The term originally became popular during Korea’s property price surge, describing people who, despite no reduction in salary or savings, watched others’ assets skyrocket simply because they did not buy a house, as if they had become poor overnight. This year, it was repurposed for the semiconductor industry. A late-January report by the Korea Economic Daily carried the headline: "Only me without Samsung Electronics? Fear of ‘lightning poor’ sends retail investors flocking in."
As Samsung and SK Hynix kept hitting new highs, not owning stocks itself began to cause anxiety. By the end of January, active stock accounts in Korea approached 100 million, a record high. Rallies bred more rallies. Those who already owned Samsung saw their wealth increase; those who did not worried about falling behind; the latter kept entering the market, pushing prices and sentiment even higher. By June, Korean media even sighed: others replicate wealth through "Samjeonnix" (a combination of Samsung Electronics and SK Hynix), while those who did not buy stocks could only endure FOMO (Fear of Missing Out).
On June 22, the combined market cap of Samsung and SK Hynix exceeded half of the entire KOSPI. The head of the Korea Exchange even had to publicly respond to market concerns over the excessive concentration of semiconductor weights. The official’s gist was: no need to worry too much; the market just thinks they are worth that much. Then the stock prices began to fall.
Not to mention unlucky souls like "Min-jun" who stepped into every pitfall of leverage, margin calls, and forced liquidation – even those Koreans who never bought Samsung and had earlier been mocked as "lightning poor" for missing the rally could hardly stay unscathed. Because at this stage, the ups and downs of Samsung and SK Hynix were no longer just matters for shareholders themselves. "Min-jun" could choose not to buy Samsung and SK Hynix, but if he bought the KOSPI index, he could not avoid them; even if "Min-jun" did not trade stocks at all, his pension was still allocating to them. As of July 6, the National Pension Service held 7.84% of Samsung Electronics, worth about 145.8 trillion won, and 7.5% of SK Hynix. The two companies already accounted for 55.7% of the NPS’s major Korean stock portfolio valuation. In the second quarter alone, the appreciation of these two holdings contributed nearly 80% of the portfolio’s gains.
Looking one layer further out, even if "Min-jun" did not care about his pension, Samsung’s factories were still there. In May this year, the Samsung Electronics union prepared to launch an 18-day strike. The South Korean government held an emergency meeting over it and even considered invoking the rarely used "emergency arbitration" procedure. According to figures given by Prime Minister Kim Min-seok at the time, Samsung Electronics already accounted for 22.8% of South Korea’s exports and 26% of the domestic stock market, directly employing more than 120,000 people and connecting to about 1,700 suppliers. The government estimated that if Samsung’s semiconductor plant shut down for just one day, direct losses could reach as high as 1 trillion won; if production lines were halted for a long time and materials had to be scrapped, economic losses could even balloon to 100 trillion won.
AI added even greater leverage to the decades-old relationship between Samsung and Korea: the more successful Samsung became, the more Korea depended on it; and the more Korea depended on Samsung, the less it could afford to lose it. In June this year, South Korea’s exports surged 70.9% year-on-year, the fastest growth since 1978, with semiconductor exports skyrocketing 199.5% to $44.8 billion. Global AI investment single-handedly pulled Korea’s export data up by a huge margin. On the surface, Samsung has nearly 8 million minority shareholders, but today, even those who have never bought Samsung can hardly stand truly outside it.
