SK Hynix shares plunge 15% in Seoul despite blockbuster $26 billion Nasdaq debut

Why SK Hynix shares tumbled after a blockbuster Nasdaq debut - Earnings expectations come under scrutiny

Why SK Hynix shares tumbled after a blockbuster Nasdaq debut 1/3 Earnings expectations come under scrutiny The decline was also driven by concerns that shipments of the company's next-generation HBM4 (High Bandwidth Memory) chips may have fallen short of lofty second-quarter expectations. Investors are now closely watching the company's upcoming earnings for clarity on AI memory demand and production trends. 2/3 AI leadership remains intact SK Hynix continues to dominate the AI memory market, supplying advanced HBM chips used in AI servers by customers including Nvidia. The company held the largest share of the global HBM market in the first quarter, reinforcing its position as a key beneficiary of the AI boom despite the recent volatility. 3/3 Long-term story remains strong Analysts said Monday's decline reflected profit-taking rather than a shift in the company's long-term outlook. The capital raised from the Nasdaq listing is expected to support the expansion of AI chip production, while investors continue to view SK Hynix as one of the biggest beneficiaries of rising demand for high-bandwidth memory used in artificial intelligence.

Why SK Hynix shares tumbled after a blockbuster Nasdaq debut - Seoul shares reverse course

Why SK Hynix shares tumbled after a blockbuster Nasdaq debut 1/4 Seoul shares reverse course Despite the stellar U.S. debut, SK Hynix shares fell sharply in Seoul on Monday, dropping as much as 8% during trading. Investors booked profits after the recent rally, while broader weakness across Asian technology stocks added to the selling pressure. 2/4 Earnings expectations come under scrutiny The decline was also driven by concerns that shipments of the company's next-generation HBM4 (High Bandwidth Memory) chips may have fallen short of lofty second-quarter expectations. Investors are now closely watching the company's upcoming earnings for clarity on AI memory demand and production trends. 3/4 AI leadership remains intact SK Hynix continues to dominate the AI memory market, supplying advanced HBM chips used in AI servers by customers including Nvidia. The company held the largest share of the global HBM market in the first quarter, reinforcing its position as a key beneficiary of the AI boom despite the recent volatility. 4/4 Long-term story remains strong Analysts said Monday's decline reflected profit-taking rather than a shift in the company's long-term outlook. The capital raised from the Nasdaq listing is expected to support the expansion of AI chip production, while investors continue to view SK Hynix as one of the biggest beneficiaries of rising demand for high-bandwidth memory used in artificial intelligence.

Wall Street emerges as tool to draw Korean AI investment to US - The Korea Times

SK Group Chairman Chey Tae-won, front row center, celebrates SK hynix's Nasdaq listing in New York, Friday (local time). Yonhap SK hynix's Nasdaq listing signals a shift in Washington's strategy to attract Korean investment. Under the former Joe Biden administration, U.S. industrial policy centered on incentives, such as the CHIPS and Science Act, offering billions of dollars in subsidies to attract semiconductor manufacturing to the U.S. While the strategy succeeded in drawing large-scale investments from global chipmakers, including Samsung Electronics and SK hynix, it also placed considerable financial pressure on companies to commit massive capital expenditures before realizing returns. The recent Nasdaq debut of SK hynix, however, suggests that the U.S. is adding a new dimension to its strategy. By providing Korean companies with direct access to the world's largest capital market and a broad base of artificial intelligence (AI)-focused investors, Washington is increasingly creating an environment in which expanding U.S. operations becomes a commercially attractive decision rather than one driven solely by political or policy pressure. As global demand for AI infrastructure continues to accelerate, investors have rewarded companies positioned at the center of the AI supply chain with premium valuations, allowing firms such as SK hynix, to secure funding under more favorable conditions while simultaneously strengthening their presence in the U.S. The company's Nasdaq listing was met with strong investor demand, underscoring Wall Street's appetite for AI-related semiconductor stocks. Shortly after the listing, SK Group Chairman Chey Tae-won also signaled plans to expand SK Group's investment in the United States, saying the company has already invested more than $35 billion and is considering significantly larger commitments. "SK is already investing more than $35 billion in the U.S. side ... My plan is that much bigger number," he said during an interview with Bloomberg TV following the listing. Industry officials said the evolving approach reflects a meaningful shift in Washington's trade and industrial strategy. Rather than relying exclusively on subsidies or diplomatic and trade pressure to force overseas manufacturers to build facilities in America, the U.S. is moving to combine industrial policy with the financing power of Wall Street to reinforce its AI ecosystem and semiconductor supply chain. The SK hynix case has also raised the possibility that more Korean companies could consider listings on U.S. exchanges, particularly as American investors continue to assign higher valuations to businesses tied to AI and advanced semiconductor technologies. Despite growing interest, however, industry officials believe the number of potential candidates remains limited in the near term. "Among other major Korean manufacturers, companies such as Hyundai Motor and LG Energy Solution are grappling with slowing demand in their respective industries, making additional overseas listings difficult to justify under current market conditions," an industry official said. "Raising fresh equity through a U.S. listing would also be less compelling without a strong growth narrative capable of attracting global investors." Samsung Electronics presents a case in contrast. Unlike SK hynix, the world's largest memory chipmaker maintains one of the strongest cash positions among global technology companies, reducing the need to raise capital through new share offerings. With ample financial resources to fund future investments independently, Samsung has little incentive to immediately pursue a Nasdaq listing simply as a financing tool.

SK Hynix plunges after Nasdaq debut amid profit-taking, diminishing earnings optimism

SEOUL, July 13 (Reuters) - SK Hynix shares fell more than 15% in trading on Monday, its biggest one-day decline on record, as investors in Seoul cashed out of a scorching share price rally following its Nasdaq debut last week. The declines in SK Hynix's shares, alongside those of rival chipmaker Samsung Electronics, contributed to a 9% plunge in the Kospi, triggering a 20-minute trading halt. Korean stocks extended losses after trading resumed, even as President Lee Jae Myung said on Monday his administration would channel government support into three major projects in chips, artificial intelligence data centres and physical AI. The world's leading AI memory chipmaker, SK Hynix, raised over $26 billion last week selling American Depositary Receipts priced at $149 each, after its Korean shares more than tripled this year. The ADRs opened 14% above the offer price at $170 before ending their first trading day with a 12.8% gain. "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, who values the company at $160 per ADR. "Despite accelerating artificial intelligence adoption, monetisation remains uncertain and profitability for key players, such as OpenAI, appears to be under pressure," she said. "Funding is also shifting toward debt or equity, raising concerns about the maintainability of current spending levels." Volatility in SK Hynix shares has surged this year as it has become a target of global investors betting on a sustained boost to profits from a shortage of high-bandwidth memory chips used in AI data centres, with many investors using leveraged exchange-traded funds that have amplified returns and losses. In Hong Kong, a single-stock ETF tracking SK Hynix offered by fund manager CSOP, which uses leverage to target twice the daily returns of its shares, lost more than a third of its value on Monday, its biggest one-day decline since listing in October. After the rout in the Seoul market on Monday, SK Hynix's U.S. ADRs, which represent one-tenth of a share and closed at $168 on Friday, were left trading at about a 37% premium to its South Korean share price. "Companies with both U.S. and home-market listings often trade at a premium in the U.S., benefiting from broader investor access, deeper liquidity and stronger valuation support," said James Ooi, a market strategist at Tiger Brokers in Singapore. Arbitrage is limited by hurdles in converting Korean shares to ADRs, he added. Ryu Young-ho, a senior analyst at NH Investment & Securities, said investors were profit-taking after the conclusion of the U.S. listing, while sentiment also suffered from caution with regard to SK Hynix's second-quarter earnings. He said investors had expected shipments of SK Hynix's HBM4 chips to increase from the second quarter, but that the increase does not appear to have materialised at scale. Ryu also said investors had moderated earnings expectations because SK Hynix, with its greater exposure to the HBM market than crosstown rival Samsung Electronics, was set to benefit less from a recent rise in prices for conventional DRAM chips. SK Hynix led the market for high-bandwidth memory chips with a 58% revenue share in the first quarter, whereas Samsung and U.S. competitor Micron Technology each held 21%, Counterpoint Research data showed. HBM chips are primarily used in artificial intelligence systems for customers such as Nvidia and Alphabet's Google. (Reporting by Heekyong Yang and Gregor Stuart Hunter; Editing by Jacqueline Wong, Christopher Cushing and Michael Perry) By Heekyong Yang and Gregor Stuart Hunter