Micron Tumbles 13% As South Korean ETF Warning Fuels Chip Sell-Off

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Micron shares plummeted over 13% on Tuesday, falling as South Korea's Financial Supervisory Service contributed to a global chip sell-off with a warning about risky ETFs tied to memory chip companies like Samsung and SK Hynix.

Micron’s stock closed down 13.3% at $1,051.77, erasing two day’s worth of significant gains made by the stock Friday and Monday.

The drop came after Financial Supervisory Service Governor Lee Chan-jin told Bloomberg he regretted not blocking the launch of leveraged exchange-traded funds solely tracking Samsung and SK Hynix, noting their high-risk nature has not stopped retail investors from engaging with them.

Leveraged single stock ETFs are designed for short-term trading and can amplify daily price movements by two or three times, allowing investors to double or triple gains or losses in a single day.

The statement raised questions about whether Micron’s astronomical stock run this year was driven by momentum trading rather than fundamentals.

Micron has soared over 260% since the start of the year, when the company’s stock traded around the $300 mark.