SK Hynix’s 40% Slide Puts a Supercycle to the Test
Published on 07/20/2026 at 18:13 | Redaktion boerse-global.de
The sell-off in SK Hynix has reached a scale that forces investors to distinguish between a healthy correction and a structural break. At 1,764,000 won, the stock has shed 4.23 percent as of Monday and sits 40.94 percent below its June 25 peak of 2,987,000 won. Over the past 30 days, the decline totals 36.18 percent — a rout that has erased months of gains and dragged the broader Korean market with it.
The immediate trigger was the company’s Nasdaq debut on 10 July, which raised 26.5 billion dollars in demand for American Depositary Receipts but turned into a classic sell-the-news event. Almost as soon as trading began, the stock gave back most of its initial pop. The Kospi index lost 9 percent that same day, triggering a 20-minute market-wide halt, and a second leg of selling sent SK Hynix down another 10.95 percent on 16 July. Underlying those moves was a fresh wave of anxiety about China’s progress in artificial intelligence: the launch of Kimi K3, an open-source model from Beijing-based Moonshot AI, suggested that powerful AI can now be built far more cheaply, raising doubts about the pace at which billions of dollars in infrastructure spending will pay off.
Technically, the stock shows no clear sign of having found a floor. The relative strength index sits at 38.9 — oversold territory, but not a buy signal in itself. The price is 19.55 percent below its 50-day moving average, and annualized volatility has hit roughly 126 percent. A Korean market analyst described the situation as a “post-binge hangover,” noting that a 30?percent drop from an all-time high does not automatically create a bottom when leveraged products and index concentration can turn every rebound into another wave of selling.
That index concentration is a powerful amplifier. Samsung and SK Hynix together now represent roughly half of the entire Kospi weighting, up from about a quarter at the end of last year. A sharp move in either name drags the whole index, which in turn forces further adjustments. Leveraged ETFs linked to the chip duo have tumbled nearly 50 percent since their Seoul launch in late May, magnifying the pain for retail investors who piled in during the euphoria.
Should investors sell immediately? Or is it worth buying SK Hynix?
At the center of the debate is the earnings report expected around 29 July. The key metric will be HBM4 delivery volumes and whether operating profit meets consensus. Korea Investment & Securities estimates that operating profit in the current quarter could come in as much as 8 percent below the sell-side average, citing a higher-than-expected revenue share from High-Bandwidth Memory chips whose prices are rising more slowly than conventional memory. NH Investment & Securities analyst Ryu Young-ho has already warned that the anticipated ramp-up in HBM4 shipments has not materialized as hoped. If the numbers confirm that gap, the stock could test its 100-day moving average near 1,617,000 won.
The bull case rests on the same structural scarcity narrative that drove the stock up almost 359 percent from the start of the year to the June peak. CEO Kwak Noh-Jung has said that memory chip shortages are likely to persist beyond 2030, and the company is ploughing 100 trillion won into capacity expansion in South Korea, with 80 trillion won earmarked for NAND and 20 trillion won for advanced packaging. Micron has already sold out its HBM capacity through 2027, and UBS expects SK Hynix to capture about 70 percent of the HBM4 market for Nvidia’s upcoming Rubin platform. Bank of America calls 2026 a “supercycle” akin to the 1990s boom, forecasting global DRAM revenue growth of 51 percent and NAND growth of 45 percent year-on-year. From this vantage point, the recent slide looks like a necessary re-rating within an intact growth story.
The bear case is more nuanced and hinges on positioning. “Everyone is genuinely unsure about what is happening to memory demand and where fair value lies,” says Daniel Yoo, global strategist at Yuanta Securities. The same leveraged products that inflated the rally now threaten to deepen the correction. Memory markets have historically turned sharply once oversupply emerges, and some observers already see HBM prices entering a correction phase after 2026 as competition intensifies and production capacity expands.
SK Hynix at a turning point? This analysis reveals what investors need to know now.
Julius Baer’s head of research in Hong Kong expects volatility to remain elevated through the end of July while foreign investors reposition. Early outflows were linked to concentration limits, but more recent moves reflect a mix of profit-taking and technical rotation into the ADRs. For now, the Q2 report will serve as the defining test. If it shows accelerating HBM4 deliveries and confirms long-term supply agreements, the stock may stabilise above current levels. If it reveals a genuine miss on volumes or margins, the sell-off could deepen. The market is betting that one of those two outcomes will settle the question — and until then, every tick will be watched.
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SK Hynix Stock: New Analysis - 20 July
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