The reason behind SK Hynix’s plunge has been found!!!

Just now, South Korea’s KOSPI index fell by more than 3.8%, while SK Hynix dropped by more than 8%. $SKM
The fuse was a downgrade by local broker KIS in its outlook for SK Hynix’s second-quarter earnings.
The numbers are still astonishing: revenue is expected to be 80.9 trillion won, up 264% year over year; operating profit is expected to be 60.4 trillion won, up a whopping 556% year over year—pretty incredible, right?
But why did it plunge?
The issue is that the market originally expected profit to reach 65 trillion won. Now it’s only 60.4 trillion, nearly 8% less.
Why, even a near-miss of just 8%, did the market still refuse to buy it?
The reason turned out to be: SK Hynix sold too much HBM……
HBM is a high value-added product, but most deals are signed as long-term locked-price contracts, so the price was already set. Meanwhile, spot prices for conventional DRAM and NAND are surging.
Because SK Hynix has too high a share of long orders in HBM, its production capacity is also prioritized for HBM, which means it couldn’t fully benefit from the consumer storage price rally.
As a result: the overall average selling price was dragged down, and the profit margin fell by 8 percentage points compared with Q1.
In short: HBM is very high-end, but price increases for consumer-grade DRAM and NAND are hitting even harder.
Consumer storage orders that have been underestimated for the past two years are shifting one after another to China’s Yangtze Memory (🇨🇳), and Yangtze Memory will officially list on the A-share market this week……
This round of sell-off is the market’s “re-pricing.” HBM is increasingly leaning toward long-term supply contracts, which makes earnings more stable, but also gradually caps the upside in profit elasticity.
Therefore, institutions have cut their 2026 and 2027 profit forecasts for SK Hynix by 9% and 11%, respectively; but the target price is still kept at 3.8 million won.
The long-term logic for HBM hasn’t broken, but the concern is that it may be topping out in the short term 😥
Today’s drop is, in essence, a classic case of failed expectation management.
Previously, SK Hynix’s stock price had already priced in the belief that “every quarter must beat expectations.” Even if absolute performance hit a new high, as soon as the growth slope slows slightly, the bulls will flip immediately.
That’s what’s most terrifying about a consensus expectation:
When everyone believes you’ll score 100, even a 99 means you’re still considered to have missed expectations—and the market treats it as failing.
…That’s what’s most terrifying…
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