SK hynix Inc. (NASDAQ: SKHY) stock is facing significant pressure as the broader semiconductor sector experiences a sharp downturn. The company’s shares fell nearly 7% during premarket trading on Thursday, extending a decline that has seen the stock drop 57% from its summer peak.
The selloff is attributed to a combination of factors, including fears of Federal Reserve tightening, concerns regarding the sustainability of artificial intelligence infrastructure spending, and rising competition from Chinese manufacturers. These issues have impacted South Korean markets as a whole; the country's Kospi index dropped nearly 8% and entered a bear market, falling approximately 21% from its September high.
Analysts have noted that SK hynix has become a primary driver of broader chip trading. CNBC’s Jim Cramer highlighted that the company is more exposed to Chinese competition than Micron Technology and that weakness in SK hynix is influencing the performance of other chipmakers. D.A. Davidson Head of Technology Research Gil Luria pointed out that while Chinese DRAM suppliers are improving, they remain concentrated in lower-end products rather than high-bandwidth memory, which suggests limited immediate impact on SK hynix’s primary markets.
Separately, the company is navigating regulatory environments regarding its international operations. SK hynix is seeking U.S. approval to export additional chipmaking equipment to its Dalian, China, facility. Solidigm, SK hynix’s U.S. unit, plans to install this equipment in unused space at the Dalian site. The company stated the work is being conducted “in close consultation with and under authorization from the U.S. government” and clarified that it is not seeking to expand the facility’s overall capacity. This move could help Solidigm finance a future U.S. NAND fab. Additionally, SK hynix has discussed leasing part of Intel Corp.’s planned Ohio facility and has broken ground on an advanced-packaging plant in Indiana for high-bandwidth memory.
According to Benzinga Pro data, SK hynix shares were down 6.91% at $137.36 during premarket trading on Thursday.
