SK Hynix's 158% Rally Masks Internal Turmoil: A Subcontractor Revolt and a Galaxy-Sized Strike Risk

SK Hynix delivered a record operating profit of 45 trillion won for the 2025 fiscal year, yet the stock has shed nearly 12% in a single week as foreign investors fled Seoul’s main board. The shares closed Wednesday at 1.745 million won, unchanged on the day but still sporting a staggering 158% gain since the start of the year. That gap between corporate performance and market sentiment captures the tension coursing through South Korea’s second-largest chipmaker.

Operationally, the company is firing on all cylinders. Its first-quarter 2026 operating margin hit 72%, and net income surpassed 40 trillion won. The engine is surging demand for High-Bandwidth Memory and server DRAM, both essential to the artificial-intelligence infrastructure buildout. CEO Score, a local corporate governance research firm, recently ranked SK Hynix the best-run non-financial company in the country, nudging archrival Samsung Electronics into second place.

Management is betting big that the AI boom has legs. The company is ploughing 21.6 trillion won into the Yongin Semiconductor Cluster, moving the first cleanroom’s opening forward to February 2027. And later this year, it plans to list in the U.S. via an initial public offering that could raise as much as $14 billion. Those proceeds will finance new fabrication capacity in both South Korea and Indiana.

Should investors sell immediately? Or is it worth buying SK Hynix?

Yet beneath the headline numbers, a more complicated picture is taking shape. The logistics subcontractor P&S Logis has seen its union prepare legal action against SK Hynix under the so-called Yellow Envelope Act, which took effect in March and allows direct wage negotiations between parent companies and subcontracted workers. The issue is stark: permanent staff collected bonuses worth millions of won, while subcontractors received only five to six million won in incentives. The union is demanding an end to what it calls performance-based discrimination.

That internal friction is unfolding alongside a potentially larger disruption at a rival. Samsung Electronics faces an 18-day strike starting Thursday. If production falters, some customers may redirect orders to SK Hynix, creating a short-term tailwind. But the strike also underscores the broader labour tensions rippling through South Korea’s semiconductor industry.

The next big catalyst arrives early Thursday Korean time, when Nvidia reports quarterly results. A beat on the U.S. chip giant’s forecast would validate the aggressive capacity expansion plans of memory makers like SK Hynix. Meanwhile, the company is already looking beyond current-generation HBM: it will ship first samples of the next-generation HBM4E in the second half of 2026, with mass production scheduled for 2027.

With a market capitalisation of roughly $948 billion, SK Hynix is within striking distance of the trillion-dollar club. But to join that elite group, it must navigate a labour revolt at home, a strike at its biggest competitor, and the ever-present risk that AI spending could slow. The stock’s 12% weekly slide suggests the market is not yet convinced of a smooth path ahead.

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