SK Hynix’s Record Profits Can’t Stop the Bleeding as China Jitters and Sky-High Expectations Collide
Published on 07/29/2026 at 13:12 | Redaktion boerse-global.de
SK Hynix just delivered the strongest quarterly profit in its history, yet the stock is in freefall. The disconnect between operational performance and market sentiment has rarely been starker.
The South Korean chipmaker reported an operating profit of 60.54 trillion won for the second quarter of 2026, a staggering 557.2 percent surge year-over-year. Revenue jumped 256.8 percent to 79.32 trillion won, fueled by insatiable demand for high-bandwidth memory (HBM) chips and enterprise SSDs powering artificial intelligence infrastructure. But analysts had penciled in around 64 trillion won in operating profit, and the miss — however small relative to the headline numbers — triggered a brutal selloff.
Shares plunged 9.61 percent on Wednesday to 1,401,000 won, extending a rout that began the previous day when the stock cratered 14.65 percent in a single session. That Tuesday collapse was part of a broader bloodbath: South Korea’s KOSPI index shed 10.8 percent, its worst day in roughly five months, and Samsung Electronics tumbled more than 13 percent.
The catalyst wasn’t anything SK Hynix said or did. It was the blockbuster initial public offering of Chinese memory maker ChangXin Memory Technologies (CXMT), which spooked investors already on edge about intensifying competition from Beijing-backed chip players. Reports that a state-linked Chinese firm has begun producing immersion lithography systems for semiconductor manufacturing added fuel to the fire. Mirae Asset Securities analysts framed the panic as fear of accelerated capacity expansion and technological catch-up by CXMT following its listing, rather than concern over its current profitability.
Should investors sell immediately? Or is it worth buying SK Hynix?
South Korea’s top financial regulator has taken notice and is considering restrictions on leveraged single-stock ETFs if volatility persists.
The stock now sits more than 50 percent below its all-time high of nearly 3 million won, reached on June 25. In just 30 days, SK Hynix has shed roughly half its value. The relative strength index has plunged to 33.2, signaling deeply oversold conditions. Yet the shares still trade 19.71 percent above their 200-day moving average, a reminder of how far they had run before the reversal.
Why did SK Hynix miss expectations despite record numbers? The company’s product mix shifted more heavily toward HBM chips than anticipated, and those chips saw slower price appreciation than traditional DRAM. Delivery delays on certain high-end products, now expected to ship in the second half, also weighed.
On the balance sheet, the picture is far from dire. Cash and equivalents swelled from 54.33 trillion won in the prior quarter to 87.96 trillion won, boosted by the sale of a partial stake in Japanese chipmaker Kioxia, which generated a one-time gain of 62.166 trillion won. The company is targeting a net cash position above 100 trillion won — it stood at 69.4 trillion won at the end of June. CEO Kwak Noh-jung has described the cash pile as the backbone for multiyear investments in a capital-intensive, cyclical industry.
And invest it will. SK Hynix is ramping up 2026 capital expenditure to the high tens of trillions of won, primarily to expand production capacity for HBM4 chips, which began mass shipments in the second quarter. The company is also locking in demand early: it already has long-term supply agreements with roughly a dozen global tech giants, including Nvidia, that extend through 2030. And negotiations are already underway for HBM supply contracts covering 2027, with pricing discussed individually per customer based on DRAM market conditions, investment costs, and opportunity costs tied to HBM development.
SK Hynix at a turning point? This analysis reveals what investors need to know now.
Despite these structural tailwinds, the market remains deeply unsettled. Analysts are divided on whether the selloff represents a buying opportunity or a warning. Morgan Stanley, Mirae Asset, and KB Securities have all called the rout a buying chance, pointing to price-to-earnings ratios of just two to five for a company on track to deliver record profits. Others urge caution. Owen Lamont of Acadian Asset Management cited “incredible uncertainty” about how AI technology will ultimately reshape the economy, and noted that leveraged exchange-traded products could amplify market swings — though he stopped short of blaming them entirely for SK Hynix’s volatility.
The pain has extended to SK Hynix’s newly listed American Depositary Receipts on the Nasdaq. The ADRs slid below the psychologically important $130 level on Tuesday, closing at $130.49 — a record low since their debut earlier this month. The ADRs now sit roughly 32 percent below their 50-day average but remain 27 percent above the 200-day line. Year-to-date, despite the crash, the stock is still up 128.88 percent — a stark illustration of just how extreme the trajectory has been.
Analysts expect memory chip prices to rise at least 25 percent in the third quarter, driven by persistent HBM shortages that could last into 2028. Whether that fundamental support is enough to halt the selling depends heavily on how the market digests the company’s earnings commentary and any updates on HBM pricing negotiations for 2027. For now, SK Hynix is caught between historic profitability and a storm of sentiment it cannot control.
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SK Hynix Stock: New Analysis - 29 July
Fresh SK Hynix information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
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