SK Hynix's Record Plunge Sparks Widespread Selloff in Global Chip Stocks

A record one-day plunge in SK Hynix shares on Monday triggered a broad selloff across the global semiconductor sector, as investors booked profits following the AI memory chip leader's blockbuster Nasdaq debut last week.

A Record Decline in Seoul

Shares of SK Hynix tumbled more than 15% in Seoul, marking the stock's worst single-day performance on record. The dramatic drop, along with losses at rival Samsung Electronics, dragged South Korea's benchmark Kospi index down 9% and prompted a 20-minute trading halt, according to market data.

The downturn follows a period of intense gains for the chipmaker. The company's Korean-listed shares had more than tripled in value this year, fueled by soaring demand for its high-bandwidth memory (HBM) chips, which are critical components in AI data centers.

Global Contagion

The negative sentiment quickly spread from Asia to other major markets. In Europe, shares of key semiconductor equipment and manufacturing firms declined during morning trade:

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• Dutch firms ASML, ASMI, and Besi fell between 1% and 2%.
• Germany's Infineon dropped 2%, while France's STMicroelectronics was down approximately 1%.

The selloff was poised to continue in the U.S., with premarket trading indicating significant losses for memory and storage companies. Western Digital and Micron were pointing to declines of 6.5% and 5.4%, respectively, while chip giants AMD and Intel both pointed to opening losses of nearly 3%.

Profit-Taking Follows AI Rally

Monday's reversal comes directly after SK Hynix's highly successful U.S. listing, which raised over $26 billion last week. The company's American Depositary Receipts (ADRs), priced at $149, closed their first trading session up 12.8%.

Analysts attributed the selloff to profit-taking and growing concerns over high valuations in AI-related stocks. "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 research note. The source also noted that the stock's volatility has been magnified by the widespread use of leveraged exchange-traded funds.