Chip Stocks Drop as SK Hynix Sinks After Nasdaq Debut Amid Profit-Taking, Easing Earnings Optimism

Chip stocks dropped in premarket trading on Monday. Direxion Daily Semiconductors Bull 3x Shares fell 10%; SK Hynix fell 9%; SanDisk and Western Digital fell 7%; Micron Technology fell 6%; Seagate Technology, Lam Research, Intel, Marvell Technology, and Arm fell 4%; AMD and Qualcomm fell 3%; Broadcom and Nvidia fell 2%.

SK Hynix shares dropped as investors booked profit, ‌after a high-profile U.S. listing saw the world's leading AI memory chipmaker surge 12.8% in its Nasdaq debut on Friday.

Ryu Young-ho, a senior analyst at NH Investment & Securities, said investors were profit-taking after the conclusion of the U.S. listing, while sentiment ​also suffered from caution with regards to SK Hynix's ​second-quarter earnings.

He said investors had expected shipments of SK Hynix's HBM4 chips to ‌increase ⁠from the second quarter, but that the increase does not appear to have materialised at scale.

Ryu also said investors had moderated earnings expectations because SK Hynix, with its greater exposure ​to the HBM ​market than ⁠cross-town rival Samsung Electronics, was set to benefit less from a recent rise in prices for ​conventional DRAM chips.

SK Hynix led the market ​for high ⁠bandwidth memory chips with a 58% revenue share in the first quarter, whereas Samsung and U.S. competitor Micron Technology each held ⁠21%, ​Counterpoint Research data showed.

HBM chips are ​primarily used in artificial intelligence systems for customers such as Nvidia and Alphabet's ​Google.