SK Hynix’s Nvidia AI Factory Alliance Takes Center Stage as KOSPI Crash Triggers 7.7% Rout

SK Hynix and Nvidia forge 'AI Factory Alliance' for HBM4 and autonomous fabs, but fears of rate hikes trigger a 8% KOSPI crash, with SK Hynix stock down 21% from peak.

The ink was barely dry on SK Hynix’s landmark technology pact with Nvidia when a tidal wave of selling swept through Seoul’s equity market, sending shares of the memory giant sliding 7.68 per cent on Monday. The KOSPI index shed more than 8 per cent in a single session, tripping the exchange’s Level?1 circuit breaker as fears over US labour data and the prospect of further rate hikes rattled global investors.

SK Hynix closed at 1,911,000 won, down from 2,070,000 won on Friday and some 21 per cent below its all?time high of 2,407,000 won reached just a week earlier on 2 June. Yet the stock has still more than doubled since the start of the year — a gain of around 182 per cent — underscoring the explosive demand for its high?bandwidth memory in the age of artificial intelligence.

From supplier to strategic co?developer

The partnership, branded the “AI Factory Alliance”, was sealed at a meeting in Seoul between SK Group Chairman Chey Tae?won and Nvidia CEO Jensen Huang. It extends well beyond a conventional supply agreement. SK Hynix will act as Nvidia’s primary memory co?developer, designing customised memory solutions for the chip designer’s entire next?generation product line: the Vera Rubin supercomputer, the Vera CPU, the RTX Spark PC and the Jetson Thor robotics platform.

The most concrete near?term deliverable is HBM4 memory for the Vera Rubin systems, with volume production slated to begin in the third quarter of 2026. Each Vera Rubin NVL72 rack will pack 20.7 terabytes of HBM4 and deliver an aggregate bandwidth of 1.6 petabytes per second — a 2.7?fold improvement over the current HBM3E generation. According to estimates from Morgan Stanley, memory now accounts for a share of total rack costs that is 435 per cent higher than in the previous generation. Industry sources suggest SK Hynix has secured between 60 and 70 per cent of the HBM4 allocation for Vera Rubin.

Software integration paves way for autonomous factories

The alliance goes deeper than hardware. Nvidia is embedding its software stack directly into SK Hynix’s fabrication operations. The Korean chipmaker will use CUDA?X libraries and PhysicsNeMo to accelerate semiconductor simulations and engineering workflows, while Nvidia’s Omniverse and OpenUSD platforms will be employed to build digital twins of its manufacturing plants. The ultimate aim: fully autonomous factories by 2030, where AI?driven simulations control yield and efficiency in real time.

“SK Hynix is our largest memory partner,” Huang said during his Seoul visit. He described the current sell?off in technology stocks as a “buying opportunity”, arguing that the structural memory shortage driven by AI infrastructure demand is still in its early stages and will persist for years.

Record profitability underpins the deal

Investors had plenty of fundamental reasons to take the long view. In the first quarter of 2026 SK Hynix posted an operating margin of roughly 72 per cent. Revenue soared 198 per cent year?on?year to 52.58 trillion won, while operating profit surged 405 per cent to 37.61 trillion won. The portion of revenue attributable to the Nvidia partnership alone stood at approximately 7.78 trillion won — a figure that highlights the financial heft of the relationship.

Institutional players at Mirae Asset Securities were net buyers during Monday’s crash, apparently viewing the pullback as an entry point. NH Investment & Securities has raised its price target to 3.2 million won, citing surging demand for “agentic AI” and the company’s record profitability.

Capacity push and the Samsung wild card

SK Hynix is betting big on future demand. Chairman Chey has pledged to double wafer production capacity within five years, with major projects under way in Cheongju and Yongin, as well as an advanced?packaging facility in the United States. Capital expenditure this year will comfortably exceed the 30.2 trillion won spent in 2025, though management has not given a specific figure.

The next technological leap is already on the horizon: SK Hynix intends to ship samples of the seventh?generation HBM4E memory in the second half of 2026, with mass production targeted for 2027.

Yet the outlook is not without risks. Samsung’s HBM4 qualification with Nvidia remains a key variable. If Samsung can bring its product to volume production in the fourth quarter of 2026, expectations for SK Hynix’s market share could moderate. Conversely, further delays at its domestic rival would likely amplify the valuation premium that SK Hynix already commands — a premium that, on a 200?plus per cent year?to?date run, still looks hard to ignore even after Monday’s carnage.