SK Hynix's Chairman Bets Personal Won on a Stock the Market Can't Stop Selling

SK Hynix posts record Q2 but shares fall 50% in a month; chairman Chey Tae-won buys $3.5M worth, citing chip demand and long-term growth.

The distance between SK Hynix's income statement and its share price has rarely been wider. On Thursday, the South Korean memory-chip maker closed at 1,322,000 won after a 5.64 percent slide — the latest leg in a month-long descent that has lopped nearly half off the stock's value. Yet the company just posted the best quarter in its history.

That contradiction has produced an unusual sight: SK Group Chairman Chey Tae-won, who has never directly owned SK Hynix shares, stepped into the market on Thursday to buy 3,620 common shares worth roughly 4.79 billion won. The order was deliberately kept below the 5 billion won threshold that would trigger a 30-day pre-disclosure requirement, according to Seoul Economic Daily. Chey framed the purchase as a conviction play on the memory cycle, telling The Korea Herald that chips "will continue to be needed" and that the share price will trend upward over time. He reportedly signaled that further purchases of similar size could follow.

Record Numbers, Missing Details

The second-quarter results that preceded Thursday's slide were, by any operational measure, extraordinary. Revenue reached 79.32 trillion won, up 257 percent year over year. Operating profit hit 60.54 trillion won, a 557.2 percent jump that nonetheless missed consensus estimates by roughly 6 percent. Net income came in at 93.92 trillion won — more than 13 times the prior-year figure — though analysts attribute 63.3 trillion won of that to investment gains from the recently completed sale of SK Hynix's stake in Japanese NAND-flash maker Kioxia, a position held since 2018.

The revenue shortfall traces to a specific bottleneck: HBM4 shipments lagged expectations, pushing some revenue recognition into later quarters. SK Hynix said it began mass production of the next-generation memory in the second quarter and will ramp output through the second half. President Song Hyun-jong told analysts on the earnings call that customer demand remains robust, with buyers still asking for more capacity. The company has locked in long-term supply agreements with roughly ten customers, typically spanning five years, and discussions with additional major players continue.

What the company did not provide was detail on shareholder returns. Management said only that plans would be unveiled later in the year, leaving investors to guess at the timing, scale, and structure of any payout. That silence weighed on sentiment even as the company posted its best-ever quarter.

Capex Accelerates, Not Contracts

Rather than signaling capital discipline to soothe markets, SK Hynix is doing the opposite. This year's capital expenditure budget is set to hit the top of its 40 trillion won range — well above the 30.2 trillion won spent in 2025. The company also plans to accelerate the production ramp at its M15X fab and expand capacity after the first clean-room phase in Yongin opens in early 2027.

Analysts read the spending as evidence of structurally tight supply rather than a red flag. Josh Gilbert, Asia-Pacific market analyst at eToro, points to a gross margin of 83 percent as proof that pricing power remains intact. "That doesn't happen in a market with fading demand — that happens where customers are fighting for supply," he said.

The analyst community is split on where the stock goes from here. Korea Investment & Securities raised its target by 23.7 percent to 4.7 million won, citing ongoing AI infrastructure spending and looming memory shortages. Shinhan Investment slashed its target to 2.7 million won. Other houses sit between 2.2 million and 3.4 million won, with most maintaining buy ratings. Nomura's Cindy Park attributes the broader Korean market correction to technical factors — net foreign selling of 15.8 trillion won between June 22 and July 24, plus capacity constraints at the state pension fund — rather than deteriorating fundamentals. UBS initiated coverage of the Nasdaq-listed depositary receipts on Thursday with a buy rating and a $204 target, with analyst Nicolas Gaudois citing demand from agentic AI applications and an expected 48 percent share of the HBM market this year. Barclays goes further with a $300 target.

A Market-Wide Sell-Off

The SK Hynix slide is part of a broader Korean market rout. The Kospi has fallen as much as 33 percent over the month, including a 13 percent intraday drop on a chaotic morning that triggered trading halts for the second consecutive session. Thursday's close left the index down 1.23 percent, with leveraged single-stock ETFs amplifying swings, according to market observers. South Korea has suspended approval of new such products. Foreign investors sold roughly 20 trillion won worth of SK Hynix and Samsung shares in July, while domestic retail investors bought in similar volume.

The stock now sits about 56 percent below its record high of 2,987,000 won, reached as recently as June 25. A relative strength index near 32 signals oversold conditions. Despite the recent carnage, the shares remain up 103.48 percent year to date.

Chey's purchase is a personal gesture in a market that has not been moved by record earnings, long-term supply contracts, or analyst optimism. The next catalyst, most likely, is the shareholder return policy the company has promised but not yet detailed. Until then, the gap between what SK Hynix earns and what the market pays for it will remain the defining story — with the chairman's own money now on the line.