SK Hynix Loses a Quarter of Its Value in a Week as Goldman Doubles Down on the Memory Cycle

One of the roughest stretches Asian semiconductor trading has seen in years has left SK Hynix shareholders nursing a 24% weekly loss — and Wall Street's most prominent bull insisting the selloff has it backwards. Goldman Sachs raised its 12-month price target on the South Korean memory maker to 3.5 million Won on Sunday, arguing that a global shortage of memory supply will persist through 2028.

The vote of confidence lands barely a week after the stock posted its steepest percentage decline since November 2008. SK Hynix closed Friday at 1,272,000 KRW, still up 96% year to date despite the slide.

Foreign Funds Head for the Door

Data from the Korea Exchange lays out the scale of the retreat. Overseas investors dumped SK Hynix shares worth a net 5.35 trillion Won over the week, dragging the foreign ownership stake down to 48.85% — the lowest level since December 2021.

Two forces drove the exodus. Doubts have mounted over the near-term profitability and financing of multibillion-dollar AI data-center projects, and anxiety about US interest rates added to the pressure. Closer to home, reports that Chinese rival ChangXin Memory Technologies (CXMT) had advanced a novel 4F² DRAM cell architecture — with server DRAM planned before year-end — stoked fears of tougher competition.

Not everyone reads the move as a verdict on fundamentals. Cho Sang-hyun of Hyundai Asset Management called Friday's slump a temporary overreaction to speculative fears of an AI valuation bubble, pointing out that long-term supply contracts for high-bandwidth memory (HBM) keep a lid on the risk of inventory gluts.

Goldman's supply-side case runs along similar lines. The bank expects standard DRAM, NAND flash and HBM to be even tighter in 2027 than in 2026, and sees no short-term threat to the incumbents' technological lead. Years, in its view, would pass before new competitors reach reliable mass-production yields and clear the demanding qualification processes of industrial customers.

Dalian, Solidigm and a Denial

The turbulence coincided with a Reuters report on SK Hynix's international manufacturing footprint. According to the agency, the company sought US permission to export additional semiconductor equipment to its plant in Dalian, China — a request the report tied to plans for a new NAND flash fab for its US unit Solidigm on American soil.

SK Hynix pushed back firmly on any suggestion it was strong-arming Washington. Installation of machinery in the so-called Module B at Dalian is proceeding within existing US consultations and approvals, the company said, stressing that the work does not expand its current production capacity in China.

New Hardware for the AI Bottleneck

On the technology front, SK Hynix used the same stretch to showcase a product lineup aimed squarely at the memory-bandwidth and capacity ceilings that increasingly constrain artificial intelligence workloads in modern servers and data centers. Among the exhibits were a second-generation CXL 3.2 memory product with 256 gigabytes of capacity, its MARS rack-scale system, and progress on High Bandwidth Flash.

Earnings on the Horizon

Attention now shifts to the company's third-quarter results, due on the October 28 call at 9:00 a.m. Seoul time. Hana Securities pegs operating profit for the quarter at 7.79 trillion Won and flags the prospect of additional shareholder distributions of at least 3 trillion Won. SK Hynix has already committed to buying back and cancelling 40 trillion Won of its own shares and to returning more than half of its free cash flow from 2025 through 2027 to investors.