$SK Hynix(SKHY.US)The South Korean shares have dropped to $116 and are still falling... The US-listed shares are now at a 31% premium. At the peak of TSMC in early July, the premium was only 26%, and it fell back to 12.5% the next day.

If the memory market continues to be hot and new listings attract a flood of funds, a 30% premium might be reluctantly acceptable. But the reality is that the memory sector is being slaughtered, and the premium for US-listed shares is being pushed higher and higher, which is clearly counter-intuitive and unsustainable. If the Korean shares don't recover, the premium for the US shares will eventually be wiped out. Even TSMC had periods where its premium was almost eliminated under extreme conditions.

Honestly, the risk-reward ratio of buying SK Hynix's US shares is worse than buying $XL2CSOPHYNIX(07709.HK). At least the Hong Kong 2x ETF is linked to the South Korean shares. The underlying shares have already fallen 40%, so the downside potential isn't zero, but it should be limited, right?

It's also not as good as buying pure-blood US stocks like $Micron Tech(MU.US)$Sandisk(SNDK.US)$Western Digital(WDC.US). They don't have the headaches of tariffs and geopolitics. At their current declines, even after subtracting a 20%-30% premium, they're still cheaper than SK Hynix's US shares.

SK Hynix's premium absolutely cannot exceed that of the unique, weak-cycle monopoly that is TSMC. Micron can be a perfect substitute, not to mention SanDisk and Western Digital can also divert memory capital.

As long as the premium doesn't shrink significantly, I'm temporarily afraid to touch SK Hynix. I can't get past the psychological barrier. Waiting for Micron at $900 and Western Digital at $500 is safer and offers better value.

Personal opinion, not investment advice.