SK Hynix's Two-Front Battle: A Rejected Pay Deal and a Chinese Rival's Apple Breakthrough
Published on 08/29/2026 at 03:11 | Editorial boerse-global.de
The memory chip giant's shares took a 4.5% hit on Friday, closing at 1,653,000 won in Seoul, as a double dose of bad news rattled investor confidence. The selloff came on the heels of a labor dispute that saw workers narrowly reject a wage agreement — by a margin of just 25 votes — and a sector-wide jolt triggered by reports that Apple has begun qualifying DRAM chips from Chinese competitor CXMT for its supply chain.
A Razor-Thin Rejection
The proposed wage package, which had been tentatively negotiated with union representatives, fell short of approval when 50.08% of the 15,045 voting employees cast ballots against it. The deal would have delivered a 6.3% base salary increase, with at least 60% of this year's bonus payments converted into company stock. It also included a provision allowing SK Hynix to defer up to 3% of wages during loss-making periods.
The narrow defeat signals growing frustration among rank-and-file workers about how the spoils of the current memory chip boom are being distributed — particularly as the company simultaneously courts shareholders with a 40-trillion-won buyback program that has been running for roughly two weeks and has lifted the stock 9.9% since its announcement.
Sector-Wide Jitters
Friday's decline was amplified by an even steeper drop at rival Samsung Electronics, whose shares tumbled 8.7%. The trigger: reports that Apple has started qualifying CXMT (ChangXin Memory Technologies) as a potential DRAM supplier. CXMT, which recently went public, posted first-half profits of 77.6 billion yuan (approximately $11.6 billion) on revenue that surged 874% year-over-year — a stark illustration of how quickly the Chinese player is scaling.
The company attributes its explosive growth to the same forces that have powered SK Hynix and Samsung: global AI demand and DRAM supply constraints. But Apple's willingness to explore a Chinese alternative in the industry's most lucrative segment has investors worried about intensifying competition ahead.
Should investors sell immediately? Or is it worth buying SK Hynix?
Adding to the sector's malaise was disappointment over Samsung's concrete shareholder return targets, which reportedly fell short of expectations.
Growth Ambitions Unchanged
Despite the internal friction and market turbulence, SK Hynix's long-term trajectory remains intact. CEO Kwak Noh-Jung reiterated that the current memory chip shortage is expected to persist through the end of 2030. The company celebrated the official groundbreaking of its advanced packaging facility in West Lafayette, Indiana, on Friday — a project exceeding $4 billion that forms part of a broader investment plan unveiled roughly three weeks ago, which had driven the stock up 16.2% in the interim.
The cleanroom facility is slated for completion by October 2028, with mass production of the next-generation HBM4E memory expected to begin in the third quarter of 2029. On Thursday, SK Hynix also signed a framework agreement with Purdue University to establish a research testbed for advanced packaging technologies at the new site.
The company is also exploring additional expansion options. According to Reuters, SK Hynix is evaluating the construction of another memory plant in Japan's Miyagi prefecture, with potential investment in the tens of trillions of won. The company stressed that no final decision has been made and that any location with suitable infrastructure remains under consideration.
On the operational front, Kwak confirmed that SK Hynix is "carefully" examining deeper collaboration with Kioxia Holdings to jointly develop the NAND flash market, though no concrete plans for an indirect stake in the Japanese firm currently exist.
The Valuation Picture
The recent pullback — which leaves the stock trading 15% below its 50-day moving average — has done little to dent the broader narrative. SK Hynix reported second-quarter revenue of 79.32 trillion won in mid-August, a 257% year-over-year increase, with an operating margin of 76%. S&P Global Ratings upgraded the company's long-term credit rating to "A-" with a positive outlook on August 19, citing structural earnings gains from the AI-driven memory supercycle.
Analyst sentiment remains constructive. Needham's Quinn Bolton raised his price target to $220 from $200 on Monday, reaffirming a buy rating following the record buyback announcement. JPMorgan's Jay Kwon reiterated an "Overweight" stance the same day, suggesting SK Hynix could return up to $130 billion to shareholders next year through its expanded capital return program.
For investors, the competing narratives are hard to ignore: a company riding the AI memory wave with ambitious expansion plans and generous shareholder rewards, versus a workforce that has signaled its displeasure with how the gains are being shared. How quickly a revised agreement can be reached may determine whether the recent share price weakness persists — or whether the long-term growth story regains center stage.
Ad
SK Hynix Stock: New Analysis - 29 August
Fresh SK Hynix information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
