TLDR
- SK Hynix fell over 8% in Seoul trading, with U.S.-listed SKHY dropping 9% on Nasdaq
- Samsung dropped more than 7% as the semiconductor selloff spread across global markets
- South Korea’s KOSPI index fell 6% to 6,460.6, briefly triggering a trading halt
- Rising oil prices and Treasury yields drove investors away from high-growth AI stocks
- SK Hynix separately announced a $29 billion share buyback and cancellation plan
SK Hynix stock dropped more than 8% in Seoul on Wednesday, with its U.S.-listed SKHY falling 9% on Nasdaq. Samsung fell more than 7% in the same session.
The selloff was part of a broader move away from semiconductor stocks tied to AI. Micron and Western Digital each fell 7%, while SanDisk dropped 9% in the prior session.
South Korea’s KOSPI index fell 6% to 6,460.6, briefly hitting a circuit breaker that triggered a temporary trading halt earlier in the session.
The pressure started in U.S. markets on Tuesday, where stocks dropped as oil prices surged. The U.S.-Iran conflict showed little sign of easing, pushing energy prices higher.
Rising oil pushed bond yields up too. Higher Treasury yields raise the so-called hurdle rate for investors, making it harder to justify paying premium prices for growth stocks.
Florian Ielpo of Lombard Odier Investment Managers put it plainly: “The investment hurdle rate is rising again. This time through a combination of oil, fiscal supply and long-end term premium rather than a renewed acceleration in short-rate expectations.”
AI Boom Cuts Both Ways
SK Hynix and Samsung have been two of the biggest beneficiaries of AI-driven demand for high-bandwidth memory chips. That same exposure now makes them a target when investors rotate out of AI-related names.
When the trade unwinds, it unwinds fast. Both stocks sit at the center of the AI memory story, so any pullback in that theme hits them harder than most.
$29 Billion Buyback Announced
In a separate announcement Wednesday, SK Hynix said it plans to buy back and cancel 40 trillion won, roughly $28.61 billion, worth of treasury stock.
The company also committed to returning at least 50% of free cash flow generated between 2025 and 2027 to shareholders.
Further details on amounts and methods will be announced alongside the company’s third-quarter earnings release.
Despite Wednesday’s drop, Wall Street analysts still rate SKHY stock a Strong Buy. The average price target sits at $245.50, implying upside of around 58% from current levels.
The iShares MSCI South Korea ETF fell 8.13% on the day, while the Roundhill Memory ETF, which counts SK Hynix among its top holdings, dropped 8.76%.
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