Synopsis

SK Hynix’s US-listed shares fell nearly 8% after a strong Nasdaq debut, as investors booked profits in AI-linked chip stocks. The decline triggered broader weakness across global semiconductor stocks, with sharp losses in Seoul and the US, reflecting growing concerns over valuations and sustainability of AI-driven demand.

SK Hynix's US-listed shares fell nearly 8% in early trade on Monday, giving up part of Friday’s strong debut gains as investors booked profits after a sharp rally in AI-linked memory stocks. The South Korean chipmaker’s American Depositary Receipts dropped 7.9% to $154.7 in early trading. The fall came after the ADRs jumped more than 12% on their Nasdaq debut on Friday. SK Hynix had priced the ADRs at $149 each, opened at $170 and ended their first session at $168.

The sell-off was sharper in Seoul, where SK Hynix shares tumbled more than 15%, marking their biggest one-day fall in nearly two decades. The fall in SK Hynix and Samsung Electronics dragged South Korea’s Kospi down 9%, triggering a 20-minute trading halt.

The weakness spread to US memory and storage stocks as well. Micron Technology fell 6.4%, SanDisk dropped 8.4% and Western Digital declined 6.8%. The Philadelphia SE Semiconductor Index lost 3.6%.

SK Hynix had raised more than $26 billion last week through its US listing, selling ADRs after its Korean shares had more than tripled this year. The company has been one of the biggest global beneficiaries of the artificial intelligence boom because of its leadership in high-bandwidth memory chips, which are used in AI data centres.

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The stock’s sharp fall shows that investors are reassessing valuations after a rapid run-up. Chip stocks have had a weak start to July as concerns grow over whether the AI capital spending cycle can continue at the same pace.

Investors are also watching the supply outlook. South Korea has been pushing large chip investment plans, with President Lee Jae Myung saying the government would help speed up projects to build chip fabs worth hundreds of billions of dollars, as outlined by Samsung and SK Hynix. While such investment supports long-term capacity, it has also raised concerns that today’s tight memory supply could eventually turn into oversupply.

SK Hynix CEO Kwak Noh-jung has dismissed concerns about aggressive capacity expansion. He told Reuters that the memory industry is heading for its most severe supply shortage in 2027 and said demand could exceed the company’s production capacity well into the next decade.

Volatility in SK Hynix has risen sharply this year as global investors chased exposure to AI memory. Leveraged products have added to the swings. In Hong Kong, a single-stock ETF tracking SK Hynix and targeting twice the daily returns of the shares fell more than one-third on Monday, its steepest one-day drop since listing in October.

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