Why is SK Hynix stock plunging today?

On Thursday, SK Hynix's shares experienced a 11.1% decline, reaching ₩1,262,000, marking one of the stock's steepest single-day drops in recent months. The precipitating factor was the U.S. September consumer price index data, which exceeded expectations and reignited concerns over potential further interest rate hikes by the Federal Reserve, thereby increasing the cost of capital for AI infrastructure development that has fueled demand for SK Hynix's high-bandwidth memory chips.

Adding to the macroeconomic pressures, executives from Broadcom and Intel cautioned earlier in the week that financing constraints, rather than chip shortages or power availability, could pose the most significant hurdle for AI expansion. This sentiment unsettled investors across the memory supply chain. Furthermore, CXMT, a Chinese memory chipmaker, announced plans to commercialize a denser 4F²-based server DRAM architecture by year-end, a development that has cast a long shadow over SK Hynix's pricing power and market share, instilling fears of intensified competition in the medium term.

The impact of these developments extended beyond SK Hynix, with foreign investors curtailing their exposure to Korean semiconductor companies, resulting in substantial net selling of SK Hynix shares in the hundreds of billions of won over successive trading sessions. The broader Korean market mirrored the intensity of the sell-off, with the KOSPI opening roughly 5.6% lower and surpassing circuit-breaker levels, prompting emergency sell-side trading restrictions on both the KOSPI and KOSDAQ exchanges.

Samsung Electronics also suffered a sharp decline, indicating that the sell-off was sector-wide rather than company-specific. Similar declines were observed in Japan's Nikkei and chip-equipment firms across Asia, contributing to a global technology downturn.