Story
SK Hynix Record Plunge Sparks Global Semiconductor Sell-Off
Summary
Shares of SK Hynix plummeted by a record 15% in Seoul, triggering a widespread sell-off in semiconductor stocks across Asia, Europe, and the U.S. The drop follows the AI memory chipmaker's successful $26 billion Nasdaq debut last week.
A record one-day plunge in SK Hynix shares on Monday triggered a broad sell-off across the global semiconductor sector, as investors took profits following the memory chipmaker's blockbuster U.S. listing and weighed growing concerns over high valuations in AI-related stocks.
Record Plunge in Seoul
Shares of SK Hynix tumbled more than 15% in Seoul, marking the stock's largest single-day decline on record. The sharp reversal comes just days after the company raised more than $26 billion in a highly anticipated Nasdaq debut. The sell-off was severe enough to drag South Korea’s benchmark Kospi index down 9%, prompting a 20-minute trading halt, with rival Samsung Electronics also posting significant losses.
The decline appears to be driven by aggressive profit-taking after SK Hynix's Korean-listed shares had more than tripled in value this year, fueled by demand for its high-bandwidth memory (HBM) chips used in AI data centers.
Global Contagion
The rout quickly spread from Asia to European and U.S. markets. Key chip-related stocks fell across the board, reflecting interconnected supply chains and sector-wide sentiment.
Ad- In Europe: Dutch equipment makers ASMI, ASML, and Besi fell between 1% and 2%, while Germany’s Infineon declined 2%.
- In U.S. premarket trading: Memory chip peers saw sharp declines, with Western Digital down 6.5% and Micron shedding 5.4%. Other major chipmakers also pointed lower, with AMD and Intel both down nearly 3%.
Post-IPO Reversal and Valuation Concerns
The sell-off follows a stellar U.S. market debut for SK Hynix last week, where its American Depositary Receipts (ADRs) priced at $149 and closed their first session up 12.8%. Analysts suggest the market may be entering a period of price correction. "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, in a comment cited by Investing.com.
Market sources also noted that the stock's volatility has been amplified by the widespread use of leveraged exchange-traded funds, which can magnify both gains and losses. The chip sector's pullback on Monday was also set against a backdrop of broader market caution amid a reported escalation in Middle East tensions.