Samsung and SK Hynix Shares Plunge on China Competition Fears
- Shares of SK Hynix fell about 9% in Seoul on Tuesday, October 13, after competitor ChangXin Memory Technologies announced progress on a denser DRAM design that triggered a...
- The announcement from China's ChangXin Memory Technologies centered on a 4F² cell layout designed to pack more memory into the same chip area, with plans to ship server...
- Saxo strategist Charu Chanana told Reuters that the development served as a clear trigger for the selloff in memory stocks.
ChangXin Memory Technologies Triggers Regional Sell-Off
Shares of SK Hynix fell about 9% in Seoul on Tuesday, October 13, after competitor ChangXin Memory Technologies announced progress on a denser DRAM design that triggered a broader sell-off across memory chip stocks, Yahoo Finance reported.
The announcement from China’s ChangXin Memory Technologies centered on a 4F²
cell layout designed to pack more memory into the same chip area, with plans to ship server memory using the design by the end of 2026, according to Yahoo Finance.
Saxo strategist Charu Chanana told Reuters that the development served as a clear trigger for the selloff in memory stocks.
The decline extended beyond SK Hynix, pulling down major industry players as markets reacted to potential shifts in future supply dynamics.
Kospi Index Tumbles Under Market Pressure
South Korea’s Kospi index dropped 7.4% at midday on October 13, reaching its lowest level since late July and triggering the first sell-side trading curb in nearly two months, Yahoo Finance reported. Samsung Electronics fell 7.7% on the same catalyst, while Micron dropped about 4% on Monday, October 12, ahead of the broader regional downturn. US-listed ADRs for SK Hynix had closed at $162.23 on Monday prior to the sharp decline in Seoul.
Soaring Margins Face New Competitive Pressures
The sell-off highlighted investor sensitivity to potential pressures on profit margins that have soared during recent memory upcycles.
SK Hynix reported a gross margin of 79.27% in the quarter ending March 2026, up sharply from 0.71% in the September 2023 quarter, with further gains recorded in June, Yahoo Finance noted.
Record Earnings Back Wall Street Support
For the quarter ending June 30, the company posted quarterly revenue of $79,318,746,000 thousand and a net profit of $93,820,236,000 thousand, according to data cited by The Globe and Mail from an earnings release.
In comparison, the company earned revenue of $22,231,952,000 thousand and a net profit of $6,997,228,000 thousand during the same period a year earlier. Barclays analyst Simon Coles maintained a Buy rating on SK Hynix with a price target of $300.00, according to a report published by The Globe and Mail.
Commercial Scale and Valuation Questions Loom
Market participants face open questions regarding whether ChangXin Memory Technologies can successfully scale its denser DRAM design to commercial production and how upcoming analyst revisions will handle the lowered share prices.