Shares of SK Hynix posted their worst single-day drop in nearly two decades on Monday, tumbling 15.4% in Seoul, according to trading data from LSEG, just one session after the South Korean chipmaker completed the largest American depositary receipt debut in history on the Nasdaq. The plunge marked the stock’s steepest fall on record and cooled, at least for a day, one of the hottest trades in global markets.

The sell-off came just three trading days after SK Hynix raised more than $26 billion by selling American depositary receipts priced at $149 each — a landmark listing that gave U.S. investors a direct way to bet on the artificial-intelligence memory boom. The receipts, which trade under the ticker SKHY, opened 14% above the offer price at $170 on Friday and closed their first day at $168. By Monday, those same U.S.-listed shares had dropped 7.9% to $154.70 in early trading.

The reversal rippled across Asia. SK Hynix, together with larger rival Samsung Electronics, dragged South Korea’s Kospi down roughly 9%, forcing a 20-minute trading halt. The damage spread to Wall Street’s chip names as well. Micron Technology fell 6.4%, SanDisk dropped 8.4%, and Western Digital lost 6.8%, while the Philadelphia Semiconductor Index shed 3.6%.

Analysts framed the drop as profit-taking rather than a collapse in the underlying story. SK Hynix shares had more than tripled in Seoul this year and climbed roughly sevenfold over the past 12 months, pushing the company past a $1 trillion market value for the first time earlier this month. After a run that steep, some pullback was expected. Phil Blancato, president and chief executive of Ladenburg Thalmann Asset Management, said there was clearly a component of profit-taking, but he did not see it as the end of the rally, pointing to strong demand stretching into late 2027 and early 2028. Daniel Yoo, global strategist at Yuanta Securities, said investors are confused about where memory demand and a fair price will settle.

Others were more cautious about the broader AI trade. Lorraine Tan, a director at Morningstar, said that even as AI adoption accelerates, the ability to turn it into profit remains uncertain, and that profitability for key players such as OpenAI appears to be under pressure. She noted that AI spending is increasingly funded by debt or equity, raising questions about how long the current pace can hold.

The stakes are enormous for SK Hynix, the world’s leading maker of high-bandwidth memory, the ultra-fast stacked chips that sit alongside Nvidia’s AI accelerators. The company controls roughly 60% of that market — the largest share of any supplier — and serves as Nvidia’s lead memory partner. That position has produced extraordinary numbers: first-quarter revenue topped ₩52 trillion with an operating margin above 70%.

Company leadership pushed back on fears that the boom is fading. Chief Executive Kwak Noh-jung said the memory industry is heading toward its most severe supply shortage in 2027, forecasting that demand will keep outstripping the company’s ability to produce chips well into the next decade.

Government support is adding fuel. South Korean President Lee Jae Myung reiterated Monday that his government would speed up projects to build new chip factories, part of a national program valued at more than $518 billion that Samsung and SK Hynix are anchoring. SK Hynix is also expanding in the United States, building a $4 billion production facility in Indiana and growing its Solidigm unit near Sacramento, California.

For everyday investors, Monday’s swing is a reminder of how much air is packed into AI-linked stocks. The memory names have delivered spectacular gains, but they now move violently on shifts in sentiment, and a single day of position-trimming was enough to wipe billions off the largest chip debut ever staged. The deeper question — whether the world truly needs as many AI servers, and as much memory, as current prices assume — remains unanswered. Until it is, shares like SK Hynix are likely to keep swinging hard in both directions, carrying rivals and the broader chip complex with them.

JBizNews Desk | New York
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