被SK海力士踢出局！「韩国芯片唱空专业户」大摩在韩快混不下去了

Original Author: Zhang Yaqi

Original Source: Wall Street CN

Today, the South Korean stock market has once again slumped into "intensive care."

SK Hynix and Samsung Electronics both fell over 7% during intraday trading, and the Korea Composite Stock Price Index (KOSPI) briefly plunged more than 6%, triggering a circuit breaker. According to media reports, the trigger for this sharp decline is linked to a figure dubbed the "Korea semiconductor grim reaper" — Morgan Stanley's Head of Asia & EM Technology Research, Shawn Kim.

In a report released on July 21, he warned that the AI-driven semiconductor memory industry rally is nearing an inflection point. Memory contract prices are expected to peak in the fourth quarter, and the proportion of net profit upgrades has fallen to 77% from its peak of 92%. Although some analysts suggest Shawn Kim's report was used to create panic and may not be the sole cause of the downturn,

this time, Shawn Kim's report not only roiled the market but also placed Morgan Stanley itself in an even more awkward position.

This top Wall Street investment bank, long known for issuing bearish reports on South Korea's semiconductor sector, is now facing a series of setbacks in the Korean market. These range from being excluded from the list of lead underwriters for SK Hynix's U.S. listing, to the failure of several major deals, placing increasing reputational and commercial pressure on its operations in the country.

The most symbolic event is SK Hynix's approximately $26.5 billion American Depositary Receipt (ADR) listing project. Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase were selected as joint lead underwriters, leaving Morgan Stanley as the only top-tier investment bank excluded. Based on an underwriting fee rate of 0.5%, the total commission for this listing is around $130 million. For an institution that prides itself on handling mega IPO projects like SpaceX and Anthropic, and is considered a leading candidate to underwrite an OpenAI IPO, this exclusion represents not just a significant financial loss but a direct blow to its standing.

Repeated Bearish Calls, Earning the Moniker "Korea Semiconductor Grim Reaper"

In South Korean investment circles, discussing Morgan Stanley's research department inevitably leads to Shawn Kim. A Korean-American managing director who joined Morgan Stanley in 2002, he currently oversees European and Asian technology research, having previously been based in Seoul and Hong Kong, and now resides in London. Within the Korean market, he has built significant influence through a series of starkly worded reports on the semiconductor industry, earning him the nickname "Korea Semiconductor Grim Reaper."

Over the past decade, he has repeatedly issued warnings near the peaks of Korea's semiconductor cycles: In 2017, he published bearish reports on NAND prices and memory supply gluts; in August 2021, he released "Memory, Winter is Coming," which accurately predicted the subsequent two-year semiconductor downturn; in September 2024, his report on the potential oversupply of HBM was seen as a trigger for the sharp sell-off in Samsung Electronics and SK Hynix shares that year — with Morgan Stanley later acknowledging errors in their short-term earnings forecasts for SK Hynix.

On July 6, Morgan Stanley's equity strategy team, led by Chief Investment Officer Michael Wilson, again recommended underweighting shares of memory semiconductor companies like Samsung Electronics, SK Hynix, and Micron. With the market already under downward adjustment pressure, this move was described by Korean industry insiders as "pouring salt on the wound."

Shawn Kim's latest report is even more systematic: NAND module maker inventories have risen to about 13 weeks, nearing the peak level of ~15 weeks during the pandemic; spot prices are weakening; some cloud service providers have indicated ample inventory, including Tencent, which has stocked approximately 90% of its required amount (this data source and definition have not been officially confirmed). He also proposed a trading logic of "sell DRAM when NAND declines," linking the two sub-sectors into the same cyclical narrative.

Despite this, Joseph Moore, Morgan Stanley's U.S. semiconductor analyst, holds a more optimistic view. He believes AI data center investment will make memory a core bottleneck, with supply shortages potentially lasting until 2028. The divergence stems from their different perspectives: Joseph Moore focuses on capital expenditures by major U.S. cloud providers, while Shawn Kim pays closer attention to early warning signals emerging from Asian distribution channels.

After Being Sidelined by SK Hynix, Morgan Stanley Begins to Reflect: Korea's Semiconductor Sector is Not to be Trifled With

The SK Hynix ADR listing is the largest IPO by a foreign company in U.S. history. Morgan Stanley's absence has triggered direct ripple effects internally.

According to several investment bankers, including former Morgan Stanley executives, a sentiment has permeated the Seoul office:

"Could it be that we lost the SK Hynix business due to the negative reports from Shawn Kim and others? We need to be more careful going forward."

This sentiment has also spread to Morgan Stanley's business lines responsible for raising capital from Korean institutional clients. According to Korean media reports, complaints have emerged within these departments:

"How are we supposed to do business like this?"

This internal rift reflects a structural dilemma commonly faced by international investment banks: the tension between research independence and the commercial interests of the investment banking business. If research reports are interpreted by the market as being manipulated for business purposes, credibility is damaged. But if they self-censor out of consideration for client relationships, they lose their research value.

A head of a major domestic investment institution commented, "Morgan Stanley has faced a string of setbacks in its Korean transactions, seemingly entering a self-reflective mode recently. Being the sole top-tier bank excluded from the SK Hynix listing project has been a significant shock to them."

Trouble Beyond One Case: A Series of Major Deals Fall Through

The SK Hynix project is not an isolated case. Several transactions that Morgan Stanley recently participated in or led in South Korea have also failed to conclude successfully.

The most high-profile among these is a dispute related to the SpaceX IPO. According to Mirae Asset Securities, a prominent Korean brokerage, it subscribed for $1.14 billion through the book-building system led by Morgan Stanley between June 5 and 10, and received a "confirmation" receipt. However, it ultimately received zero allocation. Mirae Asset suspects internally that Morgan Stanley may have omitted this subscription when transferring work to co-lead underwriter Goldman Sachs. As IPO allocation rights reside entirely with the underwriters' discretion, Mirae Asset cannot formally seek recourse. Bloomberg reported on June 30 that the allocation failure was attributed to an operational error by Mirae Asset. On July 14, Mirae Asset filed a civil lawsuit against Bloomberg over the matter, escalating the issue into a legal confrontation between a major domestic brokerage and an international media outlet. South Korea's Financial Supervisory Service has completed an on-site inspection, with results expected to be announced in a few months.

Another equally embarrassing case involves the IGIS Asset Management sale project jointly led by Morgan Stanley and Goldman Sachs. IGIS is South Korea's largest real estate asset manager, with 73 trillion won under management, including 2 trillion won in entrusted funds from the National Pension Service. Last December, the two investment banks designated Singapore-based Hillhouse Capital as the preferred acquirer. However, Hillhouse ultimately withdrew due to financing issues. Competing bidders subsequently filed a police report, alleging that pricing information was unilaterally leaked to Hillhouse during negotiations. The report implicated five individuals, including those from IGIS's controlling party and Morgan Stanley. Additionally, there are reports that details of the National Pension Service's entrusted investment were leaked during due diligence, attracting regulatory attention.

An earlier case dates back to 2017-2018 when Morgan Stanley published a report predicting that shares of biopharmaceutical company Celltrion would halve, causing significant market turmoil. Celltrion questioned the report's credibility, and speculation arose in the market linking the report to short-selling activities.

A Deeper Predicament: Research Independence vs. Business Interests

The recent upheaval highlights a structural dilemma faced by global investment banks:

There is an inherent tension between the independence of the research department and the commercial interests of the investment banking business.

If research reports are interpreted as being manipulated for business objectives, it damages credibility. Conversely, if they practice self-censorship to maintain client relationships, they forfeit their research value.

For Morgan Stanley, the controversy surrounding Shawn Kim's reports is not simply a case of "bearish calls met with retaliation." Historically, his bearish stances in 2017 and 2021 proved to be fairly prescient, while his 2024 forecast on HBM missed the mark. The source of his influence lies in the nature of semiconductors as a classic cyclical industry. When optimism peaks, contrarian warnings can often trigger asset allocation adjustments by foreign institutions first, thereby exerting a tangible impact on the Korean stock market.

From a valuation perspective, the price-to-book ratios of Samsung and SK Hynix have currently fallen back to around 1.7 times and 2.5 times, respectively, significantly below their recent highs but still above their respective long-term historical averages. This valuation range aptly reflects the market's neutral pricing logic: the memory industry is viewed as neither a pure cyclical stock, nor has the AI narrative fully materialized.

The latest report from July 21 is more methodical than previous ones, constructing a framework for predicting a price peak in the fourth quarter through cross-validation of multiple signals, including NAND module inventory weeks, profit upgrade ratios, and contract price growth rates. Morgan Stanley estimates the upper limit of HBM supply growth at around 40%. The report also incorporates a long-term addressable market of approximately $25 billion into the memory innovation track, covering multiple technology paths such as capacity, bandwidth, and power consumption.

One investment banker summarized it bluntly: "For an investment bank, successful deal records are key performance indicators. An accumulation of failed cases inevitably becomes a burden."

Morgan Stanley's current predicament in South Korea may be the most realistic illustration of this logic.