SK Hynix’s record plunge drags down global chip stocks

Investing.com -- Global chip stocks fell sharply Monday, led by a record one-day plunge in SK Hynix shares, as investors weighed a fresh escalation in Middle East tensions alongside mounting concerns over valuations in AI-related shares.

The selloff began in Asia, where SK Hynix shares tumbled more than 15%, marking the stock’s biggest one-day decline on record, as investors booked profits following a blistering rally that preceded the company’s Nasdaq debut last week. The drop, together with losses at rival Samsung Electronics, dragged South Korea’s Kospi index down 9%, triggering a 20-minute trading halt.

The rout spread to European markets at the open. Dutch chipmakers ASMI, ASML and Besi fell between 1% and 2% by 04:46 ET (08:46 GMT). In France, STMicroelectronics dropped around 1%, while Germany’s Infineon declined 2%.

U.S. chip stocks pointed lower in premarket trading as well. Western Digital and Micron shed 6.5% and 5.4%, respectively, while SanDisk tumbled nearly 7%. Seagate lost 5%, and both AMD and Intel fell close to 3%.

The sell-off followed a blockbuster listing for SK Hynix, the world’s leading AI memory chipmaker, which raised more than $26 billion last week through a sale of American Depositary Receipts priced at $149 apiece, after its Korean-listed shares more than tripled in value this year. The ADRs opened 14% above the offer price at $170 before closing their debut session up 12.8%.

"The current memory upcycle is tracking substantially stronger than expected, but our base case continues to assume normalisation in cycle dynamics, limiting upside at current levels," said Lorraine Tan, a director at Morningstar.

SK Hynix shares have seen sharply elevated volatility this year, as the stock drew heavy interest from global investors wagering on sustained profit gains tied to tight supply of high-bandwidth memory chips used in AI data centers. That volatility has been magnified by widespread use of leveraged exchange-traded funds, which have amplified both gains and losses in the stock.

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