After SK hynix Seoul “high point,” it suddenly flashed down—AI storage narrative first hits the brakes

Just after striking the Nasdaq bell on July 10, with ADR code SKHYV priced at $149 and raising $26.5 billion to set a record, three days later its hometown of Seoul—000660—slapped the market: on July 13, it plunged 15%, marking the largest single-day drop on record. It also retreated nearly 40% from the June high, with total market value falling below $900 billion. KOSPI was dragged down too, sliding 8.95% in the day, hitting the circuit breaker for the seventh time this year.

The fuse was a Q2 preview from Korea’s KIS that looked “seemingly impressive but actually below expectations.” Operating profit came in at 60.4 trillion won, about 8% lower than the market consensus of 65 trillion. The problem wasn’t demand—HBM was still getting orders—but the contract-lock pricing: most HBM is tied to 3–5 year long-term agreements (LTA). Meanwhile, this round of spot DRAM/NAND has surged by 30%–50%. As a result, SK hynix couldn’t capture the same ASP upside; the higher the share of high-end products, the more “disadvantaged” the short-term financial statements look.

Layered on top were “sell the fact” profit-taking after the ADR listing, Korea–U.S. price spread arbitrage, and the forced hedging from a pile of 2x/3x single-stock leveraged ETFs in Korean equities—amplifying the move. MU and SanDisk both fell more than 4% overnight in sync, and even BTC wobbled along with macro risk appetite. The Bank of Korea is still calling the AI supercycle story “not topped,” but in the near term, the valuation bubble has to be squeezed first. The F4 meeting will convene on Thursday to discuss leveraged ETFs—that’s the next nail.