Goldman Downgrades Sink SK Hynix and Samsung Stocks as Chip Wars Intensify

On Thursday, SK Hynix, a prominent Korean chip manufacturer, saw its stock plung after Goldman Sachs downgraded its rating for the first time in over three years. This decision was driven by Goldman analysts' assessment of intensified industry competition, which suggests that SK Hynix’s dominant position in critical products may be challenged by technological advancements from other companies.

Coincidentally, the same team of analysts from Goldman Sachs led by Lee Junyi also downgraded Samsung Electronics from a "buy" to "neutral." This resulted in Samsung’s stock experiencing its largest intra-day drop of 8.8% since April 7.

SK Hynix has significantly benefitted from the AI boom in recent years as the primary supplier of high-bandwidth memory (HBM) chips to Nvidia. However, Samsung is closely watched by the market for its efforts to gain Nvidia's HBM chip certification. If Samsung successfully closes this technological gap, SK Hynix’s profit margins could be under pressure.

Goldman's report highlighted that with increasing competition and a shift in pricing power towards SK Hynix’s major customers, HBM product prices are likely to see their first decline by 2026. Despite a renewed interest in AI and Nvidia reaching a market cap exceeding $4 trillion as the world's first semiconductor company with such value, investors remain highly sensitive to the risks within the sector.

The cautious outlook expressed by ASML Holding earlier this week also contributed to a collective fall in global chip stocks, further compounding the pressure on SK Hynix’s stock. Goldman Sachs emphasized that despite accumulating risk factors, SK Hynix's stock has notably outperformed the market with a 57% rise this year, well above Samsung Electronics' 23% rise during the same period.

Cho Junkee, an analyst at Seoul SK Securities, observed a subtle shift in market sentiment: "For a long time, foreign institutional investors generally adopted a 'long Hynix, short Samsung' strategy in the semiconductor sector, but recently this inclination has been changing. Samsung is regaining investor favor, leading some funds to adjust their portfolio allocations."

It is noteworthy that prior to Goldman's rating adjustments, Mirae Asset Securities had already downgraded Samsung Electronics earlier this week. Its analyst, Kim Young-kee, predicted that with next-generation HBM chips starting mass production next year, Samsung may gradually erode SK Hynix's market share from 2026 onward, with a significant market share gain expected for Samsung between 2026 and 2027.