SK Hynix Shares Plunge Most on Record in Deepening Korea Selloff

by Sangmi Cha, Abhishek Vishnoi of Bloomberg News, 7/13/26

South Korea’s AI-fueled stock rally came under renewed pressure Monday as SK Hynix Inc. tumbled by a record 15%, underscoring growing investor concerns that the boom has become overstretched.

Traders pointed to fears of lower-than-expected earnings and a rotation into the company’s newly listed American depositary receipts, which surged 13% in their debut on Friday.

The selloff sent the benchmark Kospi index down 9% and triggered a market-wide trading suspension. Peer Samsung Electronics Co. dropped nearly 11%. Foreign investors offloaded 1.7 trillion won ($1.1 billion) worth of Kospi shares Monday, with selling in SK Hynix accounting for most of the amount, according to exchange data compiled by Bloomberg.

It was the latest sign of how volatile the Korean market has become after the artificial intelligence boom drove massive outperformance versus global peers. Less than two months after joining the elite $1 trillion club on the feverish rally in memory stocks, SK Hynix’s market cap closed the day at $875 billion. Samsung’s valuation also fell below that milestone, with both stocks down at least 30% from peaks last month.

“SK Hynix is trading through the hangover after the dopamine rush, as the excitement that powered the rally gives way to a much harsher reset in expectations,” said Hebe Chen, a market analyst at Vantage Global Prime. A 30% fall from peak “does not automatically create a floor when leverage, index concentration and crowded positioning can still turn every retreat into another wave of forced selling.”

SK Hynix ADRs fell as much as 11% in premarket on Monday to trade about $1 above the $149 level where they priced last week ahead of their trading debut. Memory and storage peers in US dropped across the board, with Micron Technology Inc., Sandisk Corp., and Western Digital Corp. all falling more than 5%.

The company’s $26.5 billion US offering was closely watched as a test of demand for overseas offerings as well as for the longevity of the artificial intelligence rally. Even amid recent concerns over stretched AI valuations and high spending levels, the deal was more than seven times oversubscribed, according to people familiar with the matter.

“The ADR listing was highly successful, but much of that success had already been priced in,” said Chan H Lee, a managing partner at hedge fund Petra Capital Management in Seoul. “Today’s weakness appears to reflect a typical ‘sell the news’ reaction and profit-taking rather than any change in fundamentals.”

At the same time, a report from Korea Investment & Securities that projected SK Hynix’s operating profit for the latest quarter may trail consensus by 8% made the rounds in the trading community, hurting sentiment. The brokerage cited the chipmaker’s large share of revenue from high-bandwidth memory, where prices are rising more slowly than for conventional chips.

The AI boom has driven market expectations to levels that are getting harder to beat. Samsung’s blowout preliminary results last week were followed by a selloff that weighed on the global tech supply chain.

SK Hynix has gained attention among global investors for its key position as a supplier of HBM to work with Nvidia Corp.’s AI processors. The company’s Korean shares are still up more than 500% over the past year as the AI boom has pushed up prices of all kinds of memory, resulting in record earnings.

As a retail-led investor frenzy chases these AI-fueled profits in shares of SK Hynix and key rival Samsung, the Korean market has become increasingly volatile. Daily moves in the Kospi of 5% in either direction have become increasingly common.

The popularity of leveraged exchange-traded funds tracking the memory pair has fed the wild swings. Some of the largest leveraged ETFs tracking SK Hynix have dropped nearly 50% since their listing in Seoul in late May. The local bourse has activated a total of 13 circuit-breaker suspensions on the Kospi since 2000, of which seven have been issued this year.

“We anticipate elevated volatility through late July as foreign investors rebalance positions,” said Richard Tang, head of research Hong Kong at Julius Baer. “Initial outflows were tied to concentration limits, but recent activity reflects both technical rotation into ADRs and profit-taking on strong-performing memory stocks.”

While memory prices overall are climbing on dramatic shortages, HBM supply contracts are often based on less flexible long-term agreements. That’s been one argument used by those who say AI has created a “supercycle,” beyond the normal boom-and-bust pattern of chip demand.

Kwak Noh-Jung, chief executive officer at SK Hynix, said in an interview Friday that memory-chip shortages will probably persist beyond 2030. Still, memory makers racing to add production capacity have made the market nervous of the eventual profit hit when demand subsides.

With the selloff, technical metrics for SK Hynix indicate a cooling off from overheated levels earlier this year. Nico Rosti, an analyst at MRM Research, says the chipmaker’s shares now look “deeply oversold.”

“One more week down is possible, but we see that as an opportunity to buy more,” Rosti wrote in a note on Smartkarma. “A rally in Korea should push the ADR higher. So this is a good spot to buy.”

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SK Hynix Shares Plunge Most on Record in Deepening Korea Selloff

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