SK Hynix’s Two-Day Rollercoaster: Topping Samsung, Then Tumbling on a DRAM Pivot

SK Hynix delays HBM4 ramp-up to chase fatter DRAM margins, sparking a 12.5% stock crash despite long-term AI memory bets.

The celebratory champagne had barely dried on SK Hynix’s new status as South Korea’s most valuable company before the hangover set in. On Monday, the chipmaker’s market capitalisation hit 208.1 trillion won ($1.35 trillion), overtaking Samsung Electronics for the first time in 26 years as the stock soared to a record 2,945,000 won. By Tuesday, a brutal sell-off had wiped 11.55% off the share price, closing at 2,582,000 won and leaving investors nursing a 12.5% intraday plunge.

The catalyst was a report from the business daily ChosunBiz that revealed a significant strategic shift. SK Hynix is delaying the conversion of its HBM3E lines to the next-generation HBM4 standard, instead redirecting capacity toward conventional DRAM chips. The move appears to be driven by margins: the standard DRAM market is currently acutely undersupplied, offering fatter near-term returns than the ramp-up of HBM4, where yields and customer qualifications take time. Given that high-bandwidth memory already accounts for over 40% of SK Hynix’s revenue, the news hit the stock where it hurts most.

The reaction was swift and violent. The broader KOSPI index plunged nearly 10%, triggering a 20-minute trading halt, as foreign investors pulled capital en masse. SK Hynix’s shares, down 12.5% at the trough, surrendered all of the previous day’s gains and more. Yet the long-term picture remains extraordinary: the stock is still up 281% year-to-date and has gained 26% over the past month. Analysts at Daol Investment and Hanwha Investment responded on Wednesday by raising their price targets to 4.2 million won and 4.3 million won respectively, arguing that the next quarterly results will deliver a positive surprise.

The pivot is a masterclass in the tensions facing a company riding a once-in-a-generation AI boom. In the first quarter, SK Hynix reported revenue of 52.6 trillion won and operating profit of 37.6 trillion won, yielding a staggering 72% operating margin. During the earnings call in April, management stressed that HBM4 production would ramp up in line with customer plans, but also admitted that demand already exceeds its supply capacity for the next three years. The current decision to allocate more wafers to high-margin conventional DRAM can therefore be read as a short-term optimisation play—squeezing cash from a stressed market—rather than a retreat from AI memory leadership.

The stock now sits 12.3% below its all-time high, but the 50-day moving average of around 1,809,000 won remains a full 42.7% lower, underscoring how overheated the rally had become. Some analysts see Samsung’s lagging HBM4 push as an opportunity for the rival to claw back share, but SK Hynix’s value ultimately hinges on the entire memory pricing cycle, not just one product segment. The company has committed to doubling its wafer capacity for AI memory over the next five years, suggesting the long-term bet on HBM remains intact.

All eyes now turn to the second-quarter results due in the coming weeks. They will reveal whether the DRAM pivot is genuinely boosting margins or merely clouding the growth story that made SK Hynix the king of Seoul’s stock market—however briefly.