SK Hynix Hit by Worst Single-Day Rout in Years, but Earnings Due Wednesday Could Shift the Narrative
Published on 07/28/2026 at 18:12 | Redaktion boerse-global.de
The scale of Tuesday's sell-off in Seoul was staggering. SK Hynix shares collapsed 14.65 percent to close at 1,550,000 won, wiping out billions in market value in a single session. The memory chip giant had ended Monday at 1,816,000 won, meaning the stock has now shed 41.02 percent over the past 30 days and sits 48.11 percent below its June 25 record high of 2,987,000 won.
Yet the carnage extended far beyond SK Hynix alone. South Korea's benchmark Kospi index plunged 10.84 percent to 6,023.66 points, briefly piercing the 6,000 threshold for the first time since April 14. The drop triggered a circuit breaker as foreign investors offloaded a net 4.97 trillion won worth of local equities. Samsung Electronics, SK Hynix's domestic rival, lost 13.39 percent on the day. Other Korean names fared even worse: LG Innotek cratered 16.29 percent, Samsung SDI fell 11.37 percent, and Seoul Semiconductor gave back 8.78 percent. LG Chem shed 7.5 percent.
The rout was pan-Asian in scope. In Japan, Kioxia plunged more than 18 percent, Tokyo Electron dropped 10.96 percent, and Advantest lost over 10 percent. SoftBank Group, a bellwether for AI-related bets through its Arm stake, declined 4.43 percent. Taiwan Semiconductor Manufacturing Co. closed nearly 3 percent lower. The VanEck Semiconductor ETF had already fallen more than 2 percent on Monday, extending losses from the prior Friday, while Micron Technology gave up roughly 2 percent in Monday's U.S. session and was under further pressure in premarket trading Tuesday.
Two Fears Collide
The selling pressure stemmed from a confluence of worries that have been building for days. One is a renewed debate over whether the massive capital spending required to build out AI infrastructure is sustainable. Reports that Nvidia may have offered OpenAI a guarantee of up to $250 billion for a data center project fueled doubts about the viability of the investment cycle. Nvidia itself lost around 5 percent on Monday and ceded its title as the world's most valuable company to Apple.
Should investors sell immediately? Or is it worth buying SK Hynix?
The second concern is intensifying competition from China. A Chinese equipment maker has reportedly begun mass production of DUV immersion lithography tools, which could eventually supply domestic memory producers including CXMT, SMIC, and Hua Hong. At the same time, Changxin Memory Technologies (CXMT) made its debut on Shanghai's STAR board with a stunning 465.82 percent first-day gain, pushing its market capitalization to roughly 712 trillion won and making it the world's fourth-largest DRAM manufacturer.
Sundeep Gantori, chief investment officer for equities at Standard Chartered, said recent media reports about Chinese ambitions in memory chips and lithography equipment had soured sentiment across the entire semiconductor sector. Still, he argued the market is large enough to accommodate multiple players, and the AI investment cycle continues to support leading technology companies.
Owen Lamont, senior vice president at Acadian Asset Management, pointed to market structure as a potential amplifier of the moves. Leveraged exchange-traded products in Korea, Hong Kong, and the U.S. may be exacerbating volatility, he said, even if they are not solely responsible for the sharp swings in SK Hynix.
Analysts Call the Sell-Off Overdone
Several Korean brokerages pushed back against the panic. KB Securities noted that Chinese memory chip demand continues to outstrip supply, while the long-term supply contracts that Samsung and SK Hynix have secured with major U.S. tech companies limit overlap with Chinese rivals. Kiwoom Securities pointed out that the Chinese DUV production is starting with just five tools and is expected to reach only 20 units by 2027 — compared with a target of 130 units for market leader ASML. CXMT, the firm added, does not even appear on lists of foreign institutional investors.
The monthly decline in the broader Korean market has been roughly 28.9 percent, which local media noted is steeper than the drop during the Asian financial crisis. SK Hynix's relative strength index now stands at 36.1, signaling oversold conditions, and the stock is trading about 29 percent below its 50-day moving average. Yet it remains 33 percent above its 200-day average, suggesting the long-term uptrend is still intact.
SK Hynix at a turning point? This analysis reveals what investors need to know now.
Record Earnings on Deck
The timing of the sell-off is particularly striking. SK Hynix is scheduled to report second-quarter results on Wednesday — its first earnings release since listing American depositary receipts on the Nasdaq. The consensus estimate calls for a record operating profit of 64.1 trillion won on revenue of 84.1 trillion won. If confirmed, that margin would stand in sharp contrast to the day's share price action.
The options market is already pricing in a double-digit swing around the release, reflecting the heightened tension of recent sessions. Businesskorea reported that SK Hynix has converted roughly $2 billion from its ADR proceeds into won, a sign that management is moving capital operationally despite the market turmoil.
For investors, the core question is whether Wednesday's expected record numbers will reaffirm the company's fundamental strength and put the recent decline in perspective — or whether the twin fears of Chinese competition and AI funding sustainability will continue to weigh on the stock. The answer may determine whether this week's rout proves to be a short-term technical correction or the beginning of a more lasting reassessment of the AI memory chip sector.
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