SK Hynix’s Profits Soar to Record Heights While a Leverage Trap Wipes Out Billions in Market Value
Published on 07/21/2026 at 15:13 | Redaktion boerse-global.de
SK Hynix finds itself in a jarring contradiction. The memory-chip maker just delivered an operating profit that surpassed Samsung Electronics for the first time—47.2 trillion won versus 43.6 trillion won in the 2025 fiscal year—while commanding a dominant 58% share of the global HBM market. Yet the company’s stock has been in turmoil, plummeting 40.94% from its June 52-week high and dragging the broader Korean market into a bear. The culprit is not an operational misstep but a catastrophic unwinding of leveraged positions triggered by the company’s Nasdaq debut.
The trouble began with a spectacular ADR offering. SK Hynix raised over $26 billion at $149 per share, an issue that was seven times oversubscribed. The American depositary receipts jumped about 12% on their first trading day. But the euphoria quickly soured. On July 13, the Seoul-listed shares crashed 15% in a single session—the steepest daily drop in roughly two decades—forcing the Korea Exchange to temporarily halt trading. The ADR fell 7.9% to $154.70. A widening premium between the two listings, which at one point reached around 50%, only amplified the dislocation.
What followed was a cascade of forced selling. From late May, South Korean retail investors had poured the equivalent of $9.5 billion into leveraged ETFs tracking Samsung and SK Hynix. The KODEX SK Hynix 2x Leverage ETF lost roughly 70% from its June high. More than one million margin accounts were called, with between 320,000 and 360,000 fully liquidated. Regulators responded by tightening margin requirements for single-stock leveraged products, and in the first day alone, $8.6 billion changed hands across the 16 affected ETFs. The Kospi bore the brunt as well: it fell 4.5% on July 20 to 6,516.28 points, sliding more than 25% below its June peak—the textbook definition of a bear market.
Should investors sell immediately? Or is it worth buying SK Hynix?
In the midst of this turmoil, SK Group Chairman Chey Tae-won issued a remarkable warning. He described current memory prices as “abnormally high” and called for supply expansion rather than profit maximization from the shortage. Artificial intelligence-driven price spikes, he cautioned, could hurt PC and smartphone makers or lure new competitors. His remarks carry weight given SK Hynix’s market power: according to Counterpoint Research, it controlled 58% of global HBM revenue in the first quarter, well ahead of Micron and Samsung, each at 21%. CEO Kwak Noh-jung, meanwhile, expects the worst supply crunch to arrive in 2027.
Despite the caution on prices, capital spending is accelerating. SK Hynix moved forward the first clean-room startup at its Yongin cluster to February 2027 from May, committed an additional $21 billion in March, and is converting its Cheongju M15X facility into a dedicated DRAM base for high-bandwidth memory. The company is betting that the hyperscaler demand wave—Bank of America pegs global capex at $851 billion this year and $1.15 trillion in 2026—will sustain orders even if consumer-electronics clients balk at elevated pricing.
The next catalyst for the stock is a dense calendar of binary events. SK Hynix reports second-quarter results on July 29, the same day Microsoft and Meta deliver their numbers. Hana Securities estimates that a beat from Alphabet, which reports on July 22, could lift SK Hynix shares an average of 17% over the following four weeks; a miss might shave off about 3%. Also looming is the Shanghai debut of Chinese DRAM rival CXMT, which is expected to raise roughly $8.6 billion in what could be Asia’s largest IPO of the year—and which has already increased its DRAM market share from 3% to 8% in a single quarter.
For SK Hynix, the tension is between an operating performance that has never been stronger and the broken mechanicals of a stock that has never been more volatile. The chairman has told investors not to assume the current pricing lasts, even as the company builds capacity to meet a demand supercycle that its own CEO describes as the tightest on record. The outcome of that balancing act will determine whether the stock’s 171% year-to-date gain—still intact despite the carnage—represents a pause in a long uptrend or the beginning of a deeper correction.
Ad
SK Hynix Stock: New Analysis - 21 July
Fresh SK Hynix information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
Disclaimer regarding our articles: No investment advice, no buy or sell recommendation. Information on prices, companies, and markets is provided without guarantee; changes are possible at any time. Stock market transactions can lead to substantial losses. Our articles are created and reviewed in whole or in part automatically with the support of AI.
