SK Hynix Inc.'s (NASDAQ: SKHY) American depositary receipts (ADRs) closed below their IPO price for the first time Monday as investors continued to unwind positions in AI-related semiconductor stocks despite strong long-term demand for memory chips. The South Korean chipmaker fell as much as 10% to $139.01 on Monday, dropping below its $149 IPO price for the first time since the company's $26.5 billion U.S. listing earlier this month.
The drop extended a sharp reversal for one of the biggest winners of the AI boom, with investors accelerating their exit from semiconductor stocks amid mounting concerns over AI infrastructure spending and future demand.
China Fears Put SK Hynix at the Center of Memory Stock Rout
SK Hynix accounted for roughly $95 billion of the more than $541 billion erased from six major memory-chip companies on Monday, making it one of the biggest contributors to a broader semiconductor selloff that wiped more than $1 trillion from U.S. stocks.
The rout followed a report by The Information that a state-backed Chinese manufacturer had entered mass production of domestically developed deep ultraviolet (DUV) lithography systems, fueling concerns that Chinese memory-chip makers could expand production using homegrown equipment.
Seoul Shares Extend Losing Streak
In Seoul, the company's stock fell 14.65% on Tuesday to 1,550,000 KRW ($1,060.96), its steepest one-day decline in months, extending losses from last week's selloff.
SK Hynix has been one of the biggest beneficiaries of the AI spending boom as Nvidia's leading supplier of high-bandwidth memory (HDM) chips.
The company, along with Micron Technology Inc. (NASDAQ: MU) and Samsung Electronics Co Ltd, holds the majority share of the HDM market.
South Korea's benchmark KOSPI index tumbled 10.84% for its biggest one-day decline since the early stages of the U.S.-Iran conflict in March, with heavyweight chipmakers Samsung Electronics and SK Hynix, which together account for nearly half the index, leading the selloff. Samsung plunged 13.39%.
SK Hynix is scheduled to report quarterly earnings on Wednesday, its first results since its Nasdaq listing.
Price Action: SK Hynix's ADRs closed 7.47% lower at $143.02 on Monday and extended those losses by another 11.05% in the early hours of pre-market trading on Tuesday.
Benzinga edge rankings indicate SKHY has a Growth score in the 97th percentile and a Value score in the 49th percentile.