SK Hynix shares tumbled 15.37% in Seoul on Monday, their largest single-day decline on record, wiping out gains that had more than tripled the stock this year. The sell-off dragged the Kospi index down 9%, triggering an automatic 20-minute trading suspension, and pushed both SK Hynix and Samsung Electronics below the $1 trillion market-capitalisation threshold. The rout came just one session after the company’s American Depositary Receipts (ADRs) surged 12.8% in their Nasdaq debut, having raised $26.5bn in the largest-ever US listing by a foreign company.

The divergence between the two markets reflected a wave of profit-taking by domestic investors who had ridden the stock’s AI-fuelled rally. With the ADRs closing at $168.01 on Friday, representing a tenth of a common share, they traded at a roughly 37% premium to the Seoul-listed shares, a gap that analysts in Singapore said was sustained by limited arbitrage due to conversion hurdles. Leveraged products amplified the swings: a Hong Kong-listed single-stock ETF that seeks double the daily return of SK Hynix lost more than a third of its value in the session.

The pressure radiated across the global chip sector. In the US, Micron Technology fell 6.4%, SanDisk dropped 8.4% and Western Digital declined 6.8%, while the Philadelphia Semiconductor Index lost 3.6%. The sell-off coincided with a broader reassessment of AI-related valuations, as investors questioned whether the breakneck pace of capital spending on data centres could be sustained. Seoul-based analysts pointed to caution ahead of SK Hynix’s second-quarter results, noting that shipments of the next-generation HBM4 chips had not yet ramped up at the scale markets had anticipated. The South Korean government’s pledge to channel state support into chip and AI infrastructure projects did little to stem the decline.

SK Hynix’s chief executive, Kwak Noh-jung, has dismissed fears of overcapacity, forecasting that the memory industry faces its most severe supply shortage in 2027 and that demand could outstrip production capacity well into the next decade. For now, the immediate focus turns to the company’s quarterly earnings, which will provide the first concrete test of whether the AI memory boom can justify the stock’s elevated multiples. The ADR premium and the pace of HBM4 shipments will be closely watched as indicators of global investor conviction.