SK Hynix Sheds Nearly Half Its Value in a Month as China Chip Fears Trigger Circuit Breaker
Published on 07/28/2026 at 19:43 | Redaktion boerse-global.de
The sell-off in SK Hynix shares has reached a ferocity that forced South Korea's exchange to slam the brakes on trading for the eighth time this year. The memory-chip giant closed at 1,550,000 won on Tuesday, a 14.65% plunge that triggered a 20-minute circuit breaker in the Kospi after the benchmark index crashed 10.84% to 6,023.63 points, at one point falling more than 11%.
The single-day rout marks the latest chapter in a brutal slide that has erased 48.11% from the stock since its 52-week high of 2,987,000 won set on June 25. Over the past 30 trading days alone, SK Hynix has lost 41.02% of its value. The carnage extended well beyond Seoul: Samsung Electronics shed more than 13%, Samsung SDI fell 11.37%, and LG Innotek collapsed 16.29%. In Japan, Tokyo Electron dropped 10.96%, Advantest lost over 10%, and Kioxia cratered more than 18%.
A Flash Crash in Crypto Markets Spills Over
The immediate trigger for Tuesday's chaos was a flash crash in perpetual futures contracts on SK Hynix at the crypto exchange Hyperliquid, where the derivative plunged roughly 20% in a single minute before quickly recovering. That jolt of volatility bled directly into the cash equity market, amplifying an already nervous backdrop.
But the underlying anxiety has deeper roots. A report from The Information revealed that a Chinese company has begun mass-producing DUV lithography machines for chip manufacturing — a domain long dominated by Dutch equipment giant ASML, whose shares also weakened on the news. Separately, concerns are mounting around ChangXin Memory Technologies (CXMT), the Chinese DRAM maker that analysts at Seoul Economic Daily estimate has narrowed its technology gap with SK Hynix and Samsung in high-bandwidth memory (HBM) chips to just three years, down from more than five years not long ago.
Should investors sell immediately? Or is it worth buying SK Hynix?
That timeline matters enormously. Both SK Hynix and Samsung have signed multi-billion-dollar HBM supply agreements with US hyperscalers powering the AI infrastructure boom. If China closes the gap faster than expected, the premium valuation those contracts have commanded comes under threat.
The ADR Slips Below Its IPO Price
The selling pressure has followed SK Hynix across borders. Its US-listed American depositary receipts, which priced at $149 per share in a recent initial public offering, closed Monday at $143 — already below the issue price. By July 28, the ADR had fallen 8.76% to $130.49, breaching the psychological $130 mark and hitting an all-time low since listing.
Back in Seoul, the stock's relative strength index stands at 36.1, signaling oversold conditions, while the annualized 30-day volatility has surged to 123% — a measure of just how violent the current turbulence has become.
Leveraged ETFs and Structural Amplifiers
Owen Lamont of Acadian Asset Management told CNBC that the entire ecosystem of leveraged single-stock ETFs in South Korea, Hong Kong, and the US may be amplifying the swings. While he stopped short of blaming those products entirely for SK Hynix's volatility, he noted that the market structure is contributing to the ferocity of the moves. Samsung and SK Hynix are among the world's largest suppliers of HBM chips for AI servers, Lamont said, making them acutely sensitive to any shift in hyperscaler capital expenditure plans. "We face incredible uncertainty," he added. "Nobody knows how this AI process will affect our economy."
South Korea's Financial Services Commission is watching closely. Chairman Lee Eog-weon said the regulator is considering stricter trading rules for leveraged single-stock ETFs, including possible investment caps for retail investors.
Earnings Due Wednesday: Record Profit, but Will It Matter?
The sell-off comes just one day before SK Hynix reports second-quarter earnings on Wednesday, July 29. Fourteen domestic brokerages expect a record operating profit of 64.1 trillion won on revenue of 84.1 trillion won for the April-to-June period. Options markets are already pricing in a double-digit swing around the release — a sign of how febrile sentiment has become.
Whether even record numbers can stabilize the stock is an open question. Kim Minji of Must Asset Management told Bloomberg that the earnings figures alone are unlikely to act as a catalyst. What matters more, she said, is whether the company announces share buybacks and whether the major hyperscalers signal further increases in capital spending.
SK Hynix at a turning point? This analysis reveals what investors need to know now.
Shawn Oh of NH Investment & Securities sees a buying opportunity, pointing to the stock's cheap valuation and the deleveraging of Korean retail investors. But some institutional investors are already pulling capital ahead of the US tech earnings season, adding another layer of pressure.
Sundeep Gantori, chief investment officer for equities at Standard Chartered, attributes the sell-off partly to a shift in perception around China's ambitions in the memory-chip market. Recent reports about Chinese plans for both memory chips and lithography equipment have soured sentiment across the semiconductor sector, he said. Still, Gantori remains calm on the longer view: the market is large enough for multiple players to coexist and profit, he argued, while the AI investment cycle continues to support leading technology companies.
The stock now trades roughly 29% below its 50-day moving average but remains 33% above its 200-day average — a wide spread that suggests the long-term uptrend is still intact, even as the short-term pain has been severe. Wednesday's earnings report will test whether the narrative of an AI memory supercycle can regain credibility after one of the most violent single-day routs in the company's history, or whether fears of Chinese competition will continue to weigh on the stock.
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