SK Hynix Shares Slide on DeepSeek Worry as Korea Market Reopens

As the Korean stock market reopened on Monday, shares of SK Hynix, the world's second-largest memory chipmaker, slid on concerns surrounding the DeepSeek AI chatbot controversy. The company's stock price fell by as much as 4.7% after its chief financial officer, Kim Woo-hyun, warned of weaker demand ahead for memory chips used in PCs and smartphones, as well as rising competition from Chinese memory firms and growing market uncertainty. This news comes despite SK hynix reporting record highs in revenue and profit for the financial year just completed.

SK hynix's shares dropped to the 160,000 won mark, their lowest level in nine trading days, as investors grew cautious about the company's outlook. The stock market's target price for SK hynix is below the current price, indicating that foreign investors are flocking to buy low points. However, some analysts remain optimistic about the company's long-term prospects, citing its strong earnings performance and the potential for growth in AI-related memory products.

SK hynix's earnings report for 2024 highlights the "prolonged strong demand" for AI memory, particularly high-bandwidth memory (HBM), as a significant driver of its revenue growth. The company's leadership in HBM technology, with the successful development and commercialization of HBM3E, ensures that it remains a key supplier to AI giants like Nvidia. SK hynix plans to expand HBM3E supply and develop the successor HBM4 to meet customer needs.

Despite the recent market uncertainty, SK hynix remains well-positioned to capitalize on the growing demand for AI-related memory products. Its strategic focus on AI memory and HBM, coupled with its leadership in HBM technology, diversified product portfolio, and continuous investment in R&D and capacity expansion, enables the company to face potential market disruptions more effectively.



In conclusion, while the recent market uncertainty and DeepSeek AI chatbot controversy have led to a decline in SK hynix's stock price, the company's strong earnings performance and strategic focus on AI memory and HBM position it well for long-term growth. Investors should remain cautious but optimistic about SK hynix's prospects, as the company continues to invest in R&D and capacity expansion to meet growing demand.