SK Hynix Slips 4.2% as Buyback Support Fades and Solidigm Questions Linger

SK Hynix shares fell 4.2% as a broad selloff swept Asian semiconductor stocks, with investors reassessing whether the massive buildout of artificial intelligence infrastructure can actually pay for itself. The decline came against a backdrop of inflation worries and rising oil prices, and Reuters cited doubts about the sustainability of AI investments as a drag on South Korean chipmakers. Political instability in France also weighed on global risk appetite, while media reports pointed to concerns over how AI spending is being financed and intensifying competition.

The drop was not purely company-specific. Foreign investors sold into the broader market, and the pressure on SK Hynix reflected a sector-wide mood rather than a verdict on the company alone.

A Counterweight From the Server Market

Overnight, the picture shifted at least partly. SK Hynix recovered in pre-market trading alongside other Korean chip names, lifted by preliminary revenue figures from Super Micro Computer. The server maker posted $19 billion in sales, ahead of market expectations of $15 billion.

Those stronger numbers support the view that demand for AI infrastructure is still generating business. What they do not do is answer whether the debt-financed investments behind that demand earn an adequate return for the operators making them. Sentiment in chip stocks is now caught between those two readings.

Nomura Sticks to Its Guns

Nomura offered a contrasting take, reaffirming its buy rating on SK Hynix and its price target of ?4.700.000. The brokerage expects memory supply shortages to persist at least through 2028. Its call explicitly factors in worries about AI investment financing and Chinese competition — meaning the recommendation rests on expected supply constraints rather than on ignoring the risks. Continued scarcity, of course, is a forecast, not a settled outcome.

Buyback Nears Its End

Another factor is creeping in. A media report flagged the approaching completion of SK Hynix's share buyback, which could remove a source of demand for the stock. That says nothing about the company's operating performance; it concerns support on the buying side, and it lands in a market already shaped by foreign selling and uncertainty over AI spending.

Solidigm Listing Draws Regulatory Scrutiny

Behind the broader AI jitters sits a company-specific worry: a possible US initial public offering of subsidiary Solidigm, which investors fear would dilute shareholder value. Lee Chan-jin, governor of the Financial Supervisory Service (FSS), said yesterday that both relevant regulators see a conflict with listing rules governing parent and subsidiary companies. SK Hynix has said no final decision has been made on the listing, so a potential IPO should not be equated with an approved transaction.

Technology Push and the Earnings Test

On Friday at the OCP Global Summit, SK Hynix presented its next generation of AI memory and infrastructure technology. According to the company, the lineup included memory-centric server systems and a second-generation CMM-DDR5 product with 256 GB based on CXL 3.2. The presentation shows the technical direction SK Hynix is pursuing for AI infrastructure, though it leaves open the question of how sustainably customers can finance their investments — the very uncertainty weighing on the sector.

The company plans to publish its results on October 28 before 9:00 a.m. Seoul time, followed by a conference call with Korean-English interpretation. That release offers the next concrete occasion to measure market sentiment against SK Hynix's actual business performance, with stronger AI server data, doubts about the investment boom's financing, and a possibly expiring buyback all in the mix.