Samsung and SK Hynix Shares Sink 9% as Micron-Led Chip Selloff Hits South Korea
Samsung Electronics and SK Hynix shares tumbled as much as 9% on Wednesday as a Wall Street selloff in memory-chip maker Micron spread to Seoul, dragging the KOSPI sharply lower given chipmakers' outsized weight in the index.
Samsung Electronics and SK Hynix shares tumbled as much as 9% on Wednesday as a Wall Street selloff in memory-chip maker Micron spread to Seoul, dragging the KOSPI sharply lower given chipmakers' outsized weight in the index.
Shares of Samsung Electronics and SK Hynix plunged as much as 9% in early trading on Wednesday, as a sharp selloff in U.S. memory-chip maker Micron Technology crossed the Pacific and slammed South Korea's semiconductor sector. SK Hynix fell as much as 9.63% and Samsung dropped 7.64%, pulling the KOSPI down nearly 5% at the open before losses moderated slightly to around 8.36% and 7.08% respectively by late morning local time.
The rout traces back to Tuesday's Wall Street session, when Micron sank 7%, SanDisk lost 9% and SK Hynix's U.S.-listed shares fell 9.2%. The Philadelphia Semiconductor Index dropped 5% as rising Treasury yields and Middle East tensions pushed investors out of technology names. Micron had climbed nearly 18% over the previous five sessions before the reversal wiped out those gains, while Nvidia and other chip and data-storage stocks were also caught in the downdraft.
Analysts pointed to a mix of technical and macro forces rather than a sudden change in industry fundamentals. Mizuho Securities' Jordan Klein attributed part of the U.S. decline to machine-driven trading amid thin mid-August volumes, a dynamic that can exaggerate swings in what have become high-momentum memory stocks. Adding to the pressure, the U.S. 30-year Treasury yield hit its highest level since 2007 as elevated oil prices revived inflation worries, with Jefferies analyst Jeffrey Favuzza noting that high yields were weighing on semiconductor shares.
The episode underscores how outsized Samsung and SK Hynix have become within the KOSPI, amplifying any global chip pullback. Macquarie research found the two companies accounted for 71% of the index's losses during a similar rout in July, when they fell a combined 48% versus 26% for the rest of the market. KB Securities' Peter Kim told Reuters at the time that the decline was "not driven by fundamental deterioration," but rather by liquidity strains and the unwinding of leveraged, single-stock ETF positions. Societe Generale's Frank Benzimra echoed that view, describing Korean AI-linked equities as "a very crowded trade which is being unwound."
Notably, the sell-off has coincided with data suggesting memory demand remains robust. TrendForce said this week that strong AI-server demand should keep supporting NAND flash growth in the third quarter, after combined revenue for the top five NAND suppliers jumped 77% sequentially to $68.87 billion in the second quarter, with Samsung the largest supplier ahead of SK Hynix and Micron. Macquarie has gone further, warning of the "worst memory crunch in history," with AI inference-driven demand it called "off the charts" and supply constraints that may persist for up to three years.
For South Korea's export-driven economy, the disconnect between bullish industry fundamentals and volatile share prices leaves policymakers and investors watching closely. With chipmakers carrying such heavy weight on the KOSPI, further swings on Wall Street are likely to keep rippling through Seoul's markets in the days ahead.
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