SK Hynix Cheongju Plant Fire Injures 7, Production Not Interrupted, Shares Fall Over 4% in Early Trading
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A fire and minor hydrofluoric acid leak occurred at SK Hynix's Cheongju chip factory, causing seven hospitalizations and the evacuation of 3,600 employees. SK Hynix stated production equipment was unaffected and no disruptions would occur. Investigations into the cause are ongoing. Despite the incident, SK Hynix shares initially rose, continuing a strong year-to-date performance and recent market capitalization milestone. However, the broader KOSPI index declined sharply on June 2, with SK Hynix being a significant drag. The global DRAM market is in a super-cycle, with persistent supply tightness expected through 2028, underpinning strong earnings.
TradingKey - A fire broke out at South Korean semiconductor giant SK Hynix's core chip factory in its fourth campus in Cheongju, North Chungcheong Province, at approximately 10:32 a.m. local time on June 1, accompanied by a minor hydrofluoric acid leak. The fire originated on the sixth floor of a gas room connecting the M15 and M15X production lines; the blaze was quickly brought under control after the automatic sprinkler system was activated.
The incident resulted in seven injuries requiring hospitalization, and the injured have been transferred to the company's hospital for treatment. Fire authorities stated that the investigation is ongoing and that they cannot rule out the possibility of an increase in the number of casualties.
Following the incident, SK Hynix immediately initiated emergency procedures, evacuating approximately 3,600 employees from the two plants. The company stated that production equipment was unaffected and no production disruptions would occur, and they are currently investigating the exact cause of the accident. Residual gas clearance was completed that afternoon, and the incident response has concluded.
Market Reaction: Share prices retreated after initial gains; institutions remain optimistic about long-term prospects.
Following news of the accident, SK Hynix's share price faced slight intraday pressure but gradually stabilized as market concerns regarding potential production impacts eased. On June 1, SK Hynix shares rose 1.29%, continuing to reach new record highs.
The chip giant's stock price has hit several record highs recently, with a year-to-date gain of over 260%. Just a few days ago, its market capitalization successfully crossed the $1 trillion mark, making it the third Asian company to reach a trillion-dollar valuation.
However, South Korea's KOSPI Composite Index plummeted at the open on June 2, dropping from above 8,900 points to approximately 8,500 points within five minutes; as of press time, the decline was over 2%. SK Hynix fell more than 4% in early trading, acting as one of the main drags on the index.
[Source: TradingView]
Memory Supercycle Underpins Strong Earnings Expectations
From a fundamental perspective, the global DRAM market is in a super-cycle. TrendForce data indicates that contract prices for commodity DRAM surged by 93% to 98% quarter-over-quarter in the first quarter of 2026, driving total global DRAM industry revenue to grow 81% quarter-over-quarter to $97 billion.
Goldman Sachs ( GS) significantly raised its 12-month price target for SK Hynix to 3.5 million KRW on June 1 and reiterated its "Buy" rating, as the firm expects memory supply tightness to persist through 2028.
Supply chain dynamics draw significant attention.
The M15 and M15X plants at the Cheongju Campus 4 involved in this incident are core chip manufacturing facilities for SK Hynix and hold a critical position in the global DRAM and NAND flash supply chains. Although SK Hynix has clarified that production will not be interrupted, the global memory chip supply is already in a state of tight balance, and any production disruption could trigger a chain reaction in the market.
An SK Hynix spokesperson stated that the company will cooperate with relevant authorities to investigate the cause of the accident while filing reports with regulatory bodies. Currently, South Korean fire authorities, police, and SK Hynix are conducting a joint investigation into the cause of the incident.
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
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