SK Hynix's Record Limit-Up Day Caps a Week Where Leverage Cut Both Ways
Published on 08/01/2026 at 19:41 | Redaktion boerse-global.de
The arithmetic of South Korea's stock market is unforgiving: a 30% daily gain is the absolute maximum, and on Friday, SK Hynix hit that ceiling with mechanical precision. The memory-chip maker closed at 1,718,000 won, up 29.95% — the first time any stock has touched the daily limit band since its introduction in 2015, and the single best session in the company's history.
What made the move remarkable wasn't just its size, but the whiplash that preceded it. Just days earlier, the stock had plunged roughly 58% from its June 25 peak, triggering trading halts on both July 28 and 29 — the first time the exchange has ever suspended trading on two consecutive days.
A Leverage Mechanism That Works in Reverse
Analysts point to a familiar culprit for the violent swings: leveraged financial products. When the stock tumbled 15% on July 13, leveraged ETFs were forced to dump roughly $5 billion worth of SK Hynix shares, according to Bloomberg estimates — a sum equivalent to 18% of that day's entire trading volume.
Friday's rally ran the same machinery in the opposite direction. Overnight strength in US chip stocks forced short sellers of South Korean tech names to cover their positions, triggering a classic squeeze that amplified the upward move. The iShares Semiconductor ETF jumped more than 8% overnight after Amazon and Microsoft delivered quarterly results that reignited enthusiasm for AI infrastructure spending.
Should investors sell immediately? Or is it worth buying SK Hynix?
The capital flows told a clear story. Foreign investors bought semiconductor stocks net to the tune of 7.78 trillion won, with institutions adding 331.3 billion won. Retail investors, meanwhile, sold 8.01 trillion won net — exiting the rally just as the big players piled in.
A Chairman's First-Ever Purchase
The sentiment shift began with a personal gesture. SK Group Chairman Chey Tae-won bought 3,620 common shares of his own company on July 30 — his first direct open-market purchase — for roughly 4.79 billion won. By the time the stock hit its limit-up on Friday, that position had gained about $923,000.
The market read the move as a signal of confidence in the company's long-term valuation. It came after the stock had already fallen more than 30% from its June high, and was reinforced by stronger-than-expected cloud results from major US technology companies that underscored the durability of the AI investment cycle. Still, most observers credit heavy foreign buying as the primary driver of Friday's surge.
Record Numbers That Still Disappointed
The drama unfolded against a backdrop of extraordinary — yet somehow insufficient — financial results. On July 29, SK Hynix reported second-quarter 2026 revenue of 79.32 trillion won, up 257% year over year. Operating profit surged 557% to 60.54 trillion won, marking the fifth consecutive record quarter and a 61% improvement over the previous quarter. The operating margin hit a new high of 76%.
Investors initially sold the news anyway. The figures came in roughly 5% below analyst estimates of about 84.1 trillion won in revenue and 64.1 trillion won in operating profit. The bottleneck: long-term supply contracts with around ten major customers prevent SK Hynix from fully capitalizing on short-term spot-market price spikes, even as AI memory demand remains robust.
Production Shifts and a Mixed Technical Picture
The company confirmed that mass production of its sixth-generation HBM4 memory for AI accelerators began in the second quarter, with output expected to ramp significantly in the second half of the year. Management has also shown operational flexibility, shifting some HBM manufacturing capacity to conventional DDR5 memory — a response to severe shortages in the server and consumer DRAM markets, where margins could reach as high as 90% in 2026. The move secures additional profitability without ceding leadership in the HBM segment.
The balance sheet has strengthened considerably. Cash holdings reached 88 trillion won by the end of June, with a net cash position of 69.4 trillion won. For the full year, SK Hynix now expects capital expenditures at the upper end of its 40 trillion won guidance range.
Despite Friday's historic rebound, the stock remains 42.48% below its 52-week high of 2,987,000 won, set on June 25, 2026. On a 30-day basis, it's still down roughly 33%. Year to date, however, the shares have gained 164.43% — a reminder of just how powerful the underlying AI memory boom has been, even after a correction that has left visible scars.
SK Hynix at a turning point? This analysis reveals what investors need to know now.
A Market-Wide Phenomenon
The SK Hynix move was part of a historic surge across the entire Korean market. The Kospi index closed July 31 up 17.91% — its biggest daily gain ever. That followed a July in which the index had fallen more than 20%, bottoming at 5,262.77 points, a 43.9% decline that exceeded even the March 2020 COVID crash.
Two pieces of China-related news had fueled the earlier selloff: Chinese memory maker CXMT raised $8.6 billion in a Shanghai IPO and surged 466% on its debut, while reports circulated that China had begun mass production of its own lithography equipment for chip manufacturing.
Wolfe Research analyst Chris Caso remains constructive on memory stocks, citing tight supply and strong AI demand. He considers a significant oversupply unlikely before 2028, simply because building new fabrication capacity takes time.
South Korean authorities are monitoring the market's leverage risks closely, weighing options including activating the state market stabilization fund and potentially reinstating a short-selling ban. Whether Friday marks a genuine turning point or merely another episode in an increasingly volatile AI cycle is a question that will only be answered in the trading weeks ahead.
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