Short Selling Korea Semiconductor Controversy Intensifies, Morgan Stanley's Korean Investment Banking Business Under Pressure

BlockBeats News, July 24th. Today, the South Korean stock market experienced a sharp decline, with SK Hynix dropping over 8% and Samsung Electronics dropping over 7%. Some analysts believe that this decline is related to a bearish storage chip report recently released by Shawn Kim, the Technology Research Director at Morgan Stanley Asia, but others think that the report may not be the direct cause of the market downturn.

In a report released on July 21st, Shawn Kim stated that the AI-driven storage chip cycle is nearing a turning point, memory contract prices may peak in the fourth quarter, and the upward revision of earnings forecasts has decreased from 92% to 77%. The report also mentioned that NAND module manufacturers' inventory has risen to about 13 weeks, close to the peak of around 15 weeks during the epidemic, and proposed a trading logic of "selling DRAM when NAND declines."

At the same time, Morgan Stanley failed to enter the joint lead underwriter list for SK Hynix's approximately $26.5 billion American Depositary Receipt listing project. Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase were selected, with Morgan Stanley being the only top investment bank left out. Based on an estimated 0.5% underwriting fee, the total commission for this project is approximately $130 million. Several investment bankers stated that there is internal reflection within Morgan Stanley's Seoul office on whether the continuous release of negative semiconductor reports has affected its investment banking business.

In addition to the SK Hynix project, Morgan Stanley has recently been involved in the SpaceX private placement dispute and the IGIS Asset Management company sale case in South Korea. These events further highlight the conflict between the research department's independence and the commercial interests of the investment banking business, increasing the reputation and business pressure it faces in the South Korean market.