Samsung, SK Hynix stocks sink 9%: why Micron’s rout is spreading to South Korea

Samsung Electronics and SK Hynix shares fell sharply Wednesday as Tuesday’s US semiconductor rout spread across the Pacific, dragging South Korea’s market lower.

SK Hynix dropped as much as 9.63% in early trading and Samsung fell 7.64%, while the KOSPI triggered a sell-off after opening nearly 5% lower.

By 11:20 AM local time, SK Hynix was down 8.36% and Samsung 7.08%.

The move followed a Wall Street session. Micron Technology sank 7% to $940.76, SanDisk lost 9% and US-listed SK Hynix fell 9.2%.

The Philadelphia Semiconductor Index dropped 5% as rising bond yields and tensions in the Middle East pushed investors out of technology shares.

Micron stock's rout becomes South Korea’s problem

The transmission from Wall Street to Seoul was unusually direct.

Micron entered Tuesday after rising almost 18% over the previous five sessions, but the rebound reversed as investors cut exposure to chip stocks.

Nvidia fell 2.3%, while other semiconductor and data-storage names sold off.

Mizuho Securities trading desk analyst Jordan Klein attributed part of the US decline to machine-driven trading amid thin mid-August volumes.

That matters because memory shares have become high-momentum trades, where algorithmic selling and rapid shifts in positioning can exaggerate market moves.

Higher Treasury yields added another pressure point. The US 30-year yield reached its highest level since 2007 on Tuesday as elevated oil prices revived inflation concerns.

Jefferies analyst Jeffrey Favuzza told MarketWatch that high Treasury yields were among the factors weighing on semiconductor shares.

Korea’s memory giants amplify swings in the AI trade

Samsung and SK Hynix have an outsized influence on South Korea’s market, making any global semiconductor retreat particularly painful for the KOSPI.

Macquarie analysis showed the two companies accounted for 71% of the KOSPI’s losses during July’s rout. Together they fell 48%, compared with 26% for the rest of the market.

That episode showed how positioning can magnify fundamental concerns.

During the July selloff, KB Securities’ Peter Kim told Reuters that the decline was “not driven by fundamental deterioration,” but by liquidity, sentiment and forced unwinding of leveraged single-stock ETFs.

Société Générale’s Frank Benzimra made a similar point, telling Reuters at the time that Korean AI equities had become “a very crowded trade which is being unwound.”

Memory demand still looks exceptionally strong

The contradiction is that industry data have not suddenly turned bearish.

TrendForce said on Tuesday that strong AI-server demand should continue supporting NAND flash growth in the third quarter.

Data-centre purchases kept the market undersupplied in the second quarter, while combined revenue for the five largest NAND suppliers jumped 77% sequentially to $68.87 billion.

Samsung remained the largest supplier by revenue, followed by SK Hynix and Micron.

Macquarie has gone further, telling Business Insider that the industry faces the “worst memory crunch in history” and that supply constraints may not ease for three years.

It described AI inference-driven memory demand as “off the charts.”