Media365
South Korea’s stock market extended its sharp selloff on Wednesday, with memory chip giant SK Hynix leading losses despite reporting record quarterly earnings powered by the artificial intelligence (AI) boom.
The benchmark KOSPI index plunged more than 12 per cent, following an 11 per cent decline in the previous session, taking its two-day loss to over 21 per cent. The steep correction triggered a market-wide trading halt for the second consecutive day as investors rushed to lock in gains from one of this year’s strongest AI-driven rallies.
The selloff came even as SK Hynix delivered its strongest-ever quarterly performance, underscoring how elevated investor expectations have become for companies at the centre of the AI supply chain.
For the April-June quarter, SK Hynix reported revenue of KRW 79.32 trillion, up 257 per cent year-on-year, driven by booming demand for high-bandwidth memory (HBM) chips used in AI servers and data centres. However, revenue fell short of market expectations by nearly KRW 4.8 trillion, disappointing investors who had priced in an even stronger performance.
The stock dropped around 15 per cent on Wednesday, extending its two-day decline to more than 30 per cent, making it one of the biggest drags on the KOSPI.
The company’s profitability was supported by a sharp rise in memory prices as AI infrastructure spending remained robust. Average selling prices (ASP) for DRAM rose about 30 per cent quarter-on-quarter, while NAND flash memory prices jumped nearly 50 per cent, reflecting tight supply and sustained enterprise demand.
SK Hynix also reported a non-operating profit of KRW 62.17 trillion, including KRW 60.89 trillion in gains related to investment assets. This lifted net income to KRW 93.92 trillion, compared with KRW 6.99 trillion in the same period a year ago.
Despite the record numbers, investors remained focused on valuation concerns after months of sharp gains in AI-linked semiconductor stocks. Analysts said the earnings highlighted strong business fundamentals but were insufficient to justify the lofty expectations built into the company’s share price.
The broader weakness also weighed on Samsung Electronics, whose shares fell nearly 8% ahead of its quarterly earnings announcement. The KOSPI slipped below the 6,000 level for the first time since early April and is headed for its worst monthly performance on record, having lost around 35 per cent this month. Even after the correction, the benchmark remains up about 28 per cent year-to-date and has gained more than 70 per cent over the past year.
Looking ahead, SK Hynix remains optimistic about the AI-driven memory cycle. The company expects global DRAM demand to grow in the mid-20 per cent range in 2026, while NAND demand is projected to rise in the high teens, supported by long-term customer agreements, expanding AI infrastructure investments and continued technological innovation.
However, the market reaction suggests investors are demanding not just strong earnings but consistently higher-than-expected growth from companies driving the global AI boom.
