SK Hynix Slumps 10% as CXMT's 4F² DRAM Ambitions Meet Fading Buyback Support

SK Hynix closed at 1,443,000 KRW, 52% below its June peak, as CXMT's 4F² DRAM plan and fading AI capex confidence shook memory stocks.

A sector-wide selloff wiped 10% off SK Hynix on Tuesday, dragging the South Korean memory maker to a close of 1,443,000.00 KRW as investors confronted a twin threat: mounting doubts over the durability of AI-driven memory demand and fresh technological claims from Chinese rival CXMT.

The trigger came over the weekend, when CXMT chief Cao Kanyu said his company intends to unveil a server memory product built on a denser 4F² DRAM cell architecture before the end of 2026. Compared with the current 6F² standard, that design could theoretically shrink cell area by a third and lift storage density per unit of silicon. Reuters also pointed to growing nervousness about future artificial intelligence capital expenditure as a drag on the whole chip sector, while the CXMT headlines added competitive anxiety on top.

A Support Pillar Slips Away

The retreat has been compounded by the unwinding of a key domestic backstop. SK Hynix's own 40 trillion won share buyback program was approaching its scheduled completion, just as foreign investors logged heavy net selling. With that liquidity cushion thinning, the market has been forced to re-examine how long the current earnings upcycle can run.

The scale of the pullback is stark. At Tuesday's close, the stock sat 52% below its 52-week high of 2,987,000.00 KRW, a peak struck at the end of June. Sector peer Samsung extended a multi-day slide of its own, underscoring that this is not an SK Hynix-specific story.

The Gap Between Announcement and Mass Production

Whether CXMT can genuinely crack the profitable server segment is the question that will define the coming quarters. The Chinese manufacturer currently works mainly on older process nodes and remains cut off from ASML's advanced EUV lithography systems because of US export restrictions. Delivering the reliability, yields and customer qualifications that global data center operators demand is a far cry from a technical roadmap.

That distinction matters enormously for SK Hynix, which must defend its pricing power in standard DRAM while the market waits for proof. If the Chinese product turns out to be a prototype that is hard to scale, the current unease could dissipate quickly.

Where the Bull Case Still Holds

The optimistic reading rests on sustained appetite for high-performance memory geared to artificial intelligence, a high-margin niche where SK Hynix remains a central supplier and newcomers trail by years. Morgan Stanley analysts estimate the global High Bandwidth Memory market could reach 100 billion US dollars by 2028. Rising contract prices across the current semiconductor upswing add another tailwind, and server supply chains rarely switch core vendors on a whim.

The Bear Case: Share Gains and Cost Pressure

Counterpoint Research data cuts the other way. CXMT's global DRAM market share climbed to 10% in the second quarter of 2026, up from just 4% a year earlier. Should the Chinese challenger land server modules in meaningful volumes, significant oversupply becomes a real prospect.

Costs are moving in the wrong direction too. SK Hynix has reportedly agreed to a 10% price increase on lithography spare parts from equipment maker ASML, effective January 2027. Higher operating costs on existing lines, combined with expanding supply of standard memory, would squeeze margins from both ends, and a faster decline in standard DRAM prices could sharply dent next year's profit estimates.

The competitive picture is widening beyond CXMT. Counterpoint Research also notes that Yangtze Memory Technologies (YMTC) has filed for an IPO on Shanghai's STAR Market, having ranked third worldwide in NAND shipments during the second quarter of 2026. That push illustrates how quickly Chinese producers are adding capacity, a shift that could reshape the global landscape for standard and mass-market memory.

What to Watch

Near-term positioning hinges on whether the stock can hold the 1.4 million won area. A defense of that level keeps the door open to stabilization; a break below it, amid continued outflows from large foreign holders, would risk extending the correction.

Hard data on real industry demand arrives with ASML's quarterly results on October 14 and TSMC's on October 15. The decisive test, however, lands on October 27, 2026, when SK Hynix reports its own figures and must show — with concrete detail on HBM order flow and DRAM pricing — just how resilient its operating margin truly is.