Samsung, SK Hynix See Steepest Weekly Stock Drop Since 2008
South Korean chipmakers Samsung Electronics and SK hynix recorded significant share declines, driven by record foreign selling on the Kospi amid wider market concerns.
South Korean Chipmakers Face Sharp Declines
Samsung Electronics and SK hynix, major South Korean chip manufacturers, experienced their most substantial weekly share value reductions since the 2008 global financial crisis. Data from the Korea Exchange shows Samsung Electronics' shares fell 17.8% from Monday to Friday, moving from 262,000 won to 215,500 won (US$195 to US$160).
This marked its sharpest weekly drop since October 2008, when it lost 19.3%. SK hynix saw an even larger decline, tumbling 24.3% from 1.681 million won to 1.272 million won. This was its steepest fall since November 2008, when shares dropped 31.9%.
Foreign Investors Lead Massive Sell-off
Foreign investors were the primary drivers of the market downturn, offloading a net 11.21 trillion won worth of Kospi-listed shares over the past week. Samsung Electronics accounted for 3.47 trillion won of this selling, while SK hynix saw 5.35 trillion won in net foreign outflows. Together, these two chipmakers represented 78.8% of the total net foreign selling.
Foreign ownership in Samsung Electronics decreased to 45.98% by Friday, its lowest level since July 2009. For SK hynix, foreign ownership dropped to 48.85%, the lowest since December 2021.
Macroeconomic Headwinds and Competition Concerns
Despite strong earnings from both companies, investor focus shifted to external risks. These include ongoing uncertainty surrounding US interest rates and doubts about the returns on significant investments in artificial intelligence (AI). Intensifying competition from Chinese memory chipmakers also contributed to market unease.
ChangXin Memory Technologies (CXMT), China's largest DRAM producer, recently unveiled plans to launch next-generation server memory by the end of 2026. This technology aims to use a denser 4F-squared cell architecture, showing CXMT's ambition to compete with Korean firms in advanced memory.
CXMT's announcement raised questions about the long-term competitive standing of Samsung and SK hynix, despite CXMT not yet demonstrating economic mass production or disclosing detailed product specifications. SK hynix also faced additional uncertainty regarding a potential US listing for its NAND flash subsidiary, Solidigm.
Concerns suggest a separate listing could negatively affect the parent company's valuation. Park Jae-hwan, an analyst at Eugene Investment & Securities, stated that these concerns are unlikely to diminish quickly given the unfavourable macroeconomic environment. Market volatility could persist for some time.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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