SK Hynix stock fell 3.2% to 1,231,000 won in early Seoul trading on Monday, extending a historic sell-off as investors questioned the financing behind the artificial intelligence boom.
The decline followed a 24.3% weekly plunge, the South Korean chipmaker’s worst since the 2008 financial crisis.
Overseas investors dumped billions of dollars in shares, despite resilient earnings expectations and a favourable outlook for memory prices.
SK Hynix stock: Foreign investors still hold the key
Foreign investors sold SK Hynix shares worth a net 5.36 trillion won last week, according to Korea Exchange figures. The stock dropped from 1.681 million won to 1.272 million won between 12 and 16 October.
Overseas funds withdrew 11.21 trillion won from Kospi shares, with SK Hynix and Samsung Electronics accounting for nearly 79% of the total. Samsung lost 17.8% during the week.
That concentration suggests investors are cutting Korean semiconductor exposure rather than responding to an earnings collapse.
Vey-Sern Ling of Union Bancaire Privée warned that financing problems could eventually hit Asian suppliers. “If hyperscalers and neoclouds cannot fund their data center investments, that would translate into lower orders,” he told Bloomberg.
AI financing is the bigger threat
SK Hynix supplies high-bandwidth memory for AI processors, making it a major beneficiary of data-centre expansion. But borrowing costs are threatening that growth story.
CoreWeave offers an example, as the US cloud provider’s shares plunged almost 12% on Friday, while its credit-default-swap premium climbed above 1,200 basis points. That increase reflects mounting concerns about default risk.
My Bui, an economist at AMP, explained the pressure on AI infrastructure. “Rising government bond yields and wider corporate credit spreads are increasing financing costs,” Bui said, according to Reuters.
More expensive borrowing could force cloud operators to postpone projects or reduce equipment purchases, eventually hurting orders for processors and the memory inside them.
However, evidence of weaker chip orders is currently limited. SK Hynix is being repriced for a possible future slowdown rather than a demonstrated demand collapse.
China’s CXMT presents another risk after announcing progress in denser DRAM designs. Yet its ability to manufacture the technology at scale remains unproven, while its server-memory ambitions do not immediately threaten the more specialised HBM market.
Three signals that could mark a bottom
Kiwoom Securities analyst Han Ji-young urged investors to monitor CoreWeave shares, corporate bond yields and default-insurance premiums. “This is a period of rising doubts about AI companies’ ability to raise funds and generate cash,” he said.
Easing credit stress would reduce the risk of project delays. Sustained foreign buying would signal renewed confidence in Korean chipmakers.
SK Hynix’s third-quarter earnings on 28 October offer another test. An SEC filing confirms a conference call at 9 AM Seoul time.
Investors will look for clarity on HBM orders, 2027 demand and pricing. TrendForce expects conventional DRAM contract prices to rise 10% to 15% this quarter, suggesting supply remains tight.
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