Summary
Global chip stocks moved lower on Monday, led by a record intraday selloff in SK Hynix shares. The decline began in Asian trading and extended into European markets and U.S. premarket activity, as investors factored in a fresh escalation of tensions in the Middle East alongside questions about lofty valuations among AI-related semiconductor names.
Asian session: SK Hynix tumble and Korean market impact
The market rout originated in Asia, where SK Hynix shares fell more than 15% — the largest one-day drop in the stock's history — as investors took profits after an intense rally that preceded the company’s recent Nasdaq debut. Losses at Samsung Electronics complemented the move and pulled South Korea’s Kospi index down 9%, a slide that prompted a 20-minute trading halt.
SK Hynix last week raised over $26 billion through a sale of American Depositary Receipts priced at $149 each, after its Korean-listed shares had already surged this year. The ADRs opened about 14% above the offer at $170 and finished their debut session up 12.8%.
Europe and U.S.: Declines spread across chipmakers
The weakness spread to European markets at their open. By 04:46 ET (08:46 GMT), Dutch chip equipment and materials names ASMI, ASML and Besi were down between roughly 1% and 2%. In continental Europe, France’s STMicroelectronics slid about 1%, while Germany’s Infineon fell near 2%.
U.S. chip stocks were also pointing lower in premarket trade. Western Digital and Micron were reported to have dropped about 6.5% and 5.4%, respectively, while SanDisk tumbled nearly 7%. Seagate lost about 5%, and both AMD and Intel were down close to 3% in early trading indications.
Market context and analyst view
Market participants noted the rapid price swings in SK Hynix this year as the stock attracted heavy interest from global investors betting on continued profit gains tied to constrained supplies of high-bandwidth memory chips used in AI data centers. That interest, combined with broad use of leveraged exchange-traded funds, has amplified both the gains and losses in the stock.
"The current memory upcycle is tracking substantially stronger than expected, but our base case continues to assume normalisation in cycle dynamics, limiting upside at current levels," said Lorraine Tan, a director at Morningstar.
Implications
The episode highlights elevated volatility in memory names and the potential for rapid repricing when profit-taking in recently rallied names coincides with broader risk-off shifts tied to geopolitical developments. The selloff affected chipmakers directly and exerted downward pressure on related indices, particularly in South Korea.