Today, Hynix is still adjusting, and the South Korean stock market has been on circuit breakers for two consecutive days. Why did it drop so sharply? From the perspective of online timing, 1. Last Friday, there were signs of a sell the news in Nvidia's stock price on the first day after its financial report last Thursday, and the entire semiconductor sector experienced a correction last Friday. At that time, when talking about EWY, we also talked about signs of a pullback in the market after the storage sentiment was fully inflated. Over the weekend, we also saw news that foreign funds sold a net 6.8 trillion won Korean stock index on February 27th. 2. Then there is the direct impact of the situation in Iran, where South Korea relies almost entirely on imports of crude oil (with a high proportion from the Middle East). The surge in oil prices directly leads to imported inflation, while deteriorating trade conditions also result in a significant increase in manufacturing/export costs. Previously, every time the situation in the Middle East escalated, South Korean stocks were the first to become the "most vulnerable high beta market", with large-scale withdrawal of foreign investment (net sales of trillions of Korean won per day), directly driving up volatility. 3. Of course, this is also highly related to the characteristics of Korean stocks. South Korean stocks are highly concentrated in constituent stocks (dominated by a few sectors such as semiconductors, finance, and automobiles), with a high proportion of retail investors. South Koreans have strong gambling tendencies and obvious emotional trading. They are also highly dependent on foreign investment (with a significant proportion of foreign investment), which makes them extremely sensitive to global geopolitical conflicts and liquidity changes. Moreover, the mechanism of the South Korean stock market has a relatively low threshold for temporary suspension (temporary suspension/programmatic trading pause) when the index drops by 5%, and a comprehensive suspension when it drops by 8%, making it easier to trigger in terms of mechanism design. The US stock market fell 7% and hit circuit breaker. Of course, it was also discussed last Friday that the beginning of the correction in WEY actually gave an opportunity to wait for the correction to be in place. Personally, I believe that the root of the adjustment is only the adjustment after the emotions were full, combined with the risk of a significant increase in potential energy costs caused by the geopolitical conflict last weekend, which drove semiconductor stocks to digest their valuations. However, it is not a major turning point in the trend, As mentioned during last week's discussion on Nvidia's financial report, Nvidia acknowledges that the "cost pressure" comes from HBM. This means that AI not only requires more computing chips, but also more, more expensive, and more difficult to scale storage. In the foreseeable 26 years, the capital expenditures of big tech companies will still need to be spent. Let's temporarily stand on the side of 'not yet at the top', but we need to closely track the evidence of 'budget/order/guidance'. The competitive core of the storage industry has shifted from capacity scale to cutting-edge technological innovation (such as HBM4, HAMR) and stable high-end supply chain capabilities. And HBM has a very high concentration, basically competing with SK Hynix and Samsung, and Micron being the third. So as long as there is no signal of capital expenditure from big tech companies starting to peak and slow down, there is still a chance for key links in the computing power industry chain to adjust properly. Next, it depends on the direction of the situation in Iran, or is it Monday here https://(x.com)/qinba frank/status/2028343749873668349? The most critical factor in the duration of the conflict discussed by s=20 is the duration of the suspension of shipping in the Strait of Hormuz, rather than the situation itself. Looking at when the navigation in the Strait of Hormuz will resume normal is also a turning point in the impact of the current situation in Iran on the financial market. Industry needs to pay attention to Micron's financial report on March 18th, And then we can look at the AI revenue, cloud growth, and capex ROI disclosed by major technology companies in their new quarter financial reports. If there is a clear signal that 'AI has started making money' (rather than just burning money), the market will shift from 'questioning' to 'verifying'.