SK hynix Inc. (NASDAQ: SKHY) is at the center of the global memory-chip selloff, with its stock losing 12% over the last five days and an additional 3.18% during premarket trading on Wednesday, according to data from Benzinga Pro. The company is currently trading at $152.06.
Jim Cramer, the host of CNBC’s Mad Money, argued that the company’s performance is driving the broader semiconductor sector. Cramer stated that U.S. chip stocks are 'joined at the hip' with SK hynix, noting that the SMH ETF, which tracks the semiconductor industry, has wrapped up every important player in the sector. He argued that SK hynix, a memory giant that trades in both the U.S. and Korea, is leading the group.
Drew Pettit, Chief Investment Strategist at Roundhill Investments, suggested that the memory sector has entered a transition period. He noted that markets do not like stock stories that are in transition, leaving memory stocks vulnerable to negative headlines and pullbacks. Pettit also pointed out that elevated interest rates leave the broader market with limited room for disappointment.
Gil Luria, Head of Technology Research at D.A. Davidson, addressed the impact of Chinese competition. He noted that China’s CXMT has improved its technology and gained DRAM market share, but Chinese suppliers still participate mainly in the lower end of the market and do not compete in high-bandwidth memory. Luria stated that Chinese companies cannot sell chips to major U.S. customers such as Microsoft, Amazon, Alphabet’s Google, Apple, and NVIDIA. He noted that Chinese memory manufacturers still cannot satisfy domestic demand, limiting the amount of supply they can bring to international markets.
Luria remained constructive on the broader semiconductor cycle, stating that companies across the AI supply chain continue to report improving results, outlooks, and visibility.
