Chip rout puts focus on SK Hynix and TSMC

SK Hynix shares in Seoul fell more than 15% on July 13, marking the largest one-day decline in the company’s trading history based on data from LSEG. The drop followed a strong debut for the company’s listing on the Nasdaq, which had drawn significant investor interest ahead of the rout.

Analysts cited a combination of profit-taking after the overseas listing and uncertainty over how to value the new U.S.-listed shares relative to the Korean stock. The listing effectively added to the supply of shares available to investors through additional issuance, creating a fresh reference point for assessing the company’s valuation.

The abrupt decline in the Seoul-traded shares underscored shifting sentiment toward AI-related memory plays after a period of strong gains. Debate has emerged among investors over whether recent price levels fully reflect expectations for future demand from artificial intelligence workloads.

The selloff in South Korea spilled into U.S. trading, where SK Hynix American depositary shares dropped 9.3% on their second day of trading. That move left the ADRs trading only a few dollars above the $149 level at which they were priced ahead of their debut.

The weakness was part of a broader decline in memory and storage stocks in the U.S. market. Peers across the sector moved lower as investors questioned how extended the recent AI-driven rally had become.

Analysts noted that despite near-term volatility, structural demand for AI-related memory is still expected to outpace supply, though current trading reflects uncertainty over the appropriate valuation for these expectations. The new ADR line for SK Hynix has become an additional benchmark that investors can use to compare pricing between markets.

Following the initial plunge in SK Hynix shares, trading in Seoul remained fragile. The Kospi Index struggled for direction and ultimately declined around 3% as chip-related names weighed on the benchmark.

Local peer Samsung Electronics also contributed to the index’s weakness, reflecting wider caution toward the memory and semiconductor segment. The continued selling highlighted how a single large-cap name can influence sentiment across the domestic equity market when sector narratives shift.

Market participants are now watching whether the recent moves represent a short-term adjustment after sharp gains or a more sustained reassessment of AI-related earnings prospects for memory producers.

Amid the volatility in memory stocks, investor attention has turned to upcoming results from Taiwan Semiconductor Manufacturing Company (TSM). TSMC (TSM) is scheduled to report second-quarter earnings on July 16, with markets closely monitoring any updates to its outlook.

The company has indicated it expects full-year 2026 revenue to grow more than 30% in U.S. dollar terms. Its 2026 capital expenditure plan, guided at $52 billion to $56 billion, is seen as an important indicator of how much additional AI chip capacity the industry is preparing to build.

Investors are particularly focused on whether TSMC revises its full-year guidance, issues a stronger or weaker forecast for the next quarter, or adjusts its capex plans. These signals are being treated as a bellwether for the broader AI chip complex, including foundry, packaging and memory-linked names such as SK Hynix.