SKHY Stock Slips Premarket After Korean Memory Giant Drops $38B Expansion Plan Amid AI Hyperscaler Capex Frenzy

Last month, South Korea announced an investment of $880 billion, mostly anchored by SK Hynix and Samsung, to expand the country’s chip manufacturing and AI capabilities.

• SK Hynix said it will invest in a new DRAM fabrication facility in Yongin and a NAND manufacturing plant in Cheongju.
• The company will detail shareholder return plans in the third quarter, it said in a separate filing.
• Stocktwits sentiment for SKHY was ‘bearish’ on Friday.

U.S.-listed shares of SK Hynix dropped nearly 0.2% in premarket trading on Friday after the South Korean memory giant revealed it would spend 54 trillion won ($38 billion) on expansion of its chipmaking facilities in the country.

SK Hynix said it will invest in a new DRAM fabrication facility in Yongin and a NAND manufacturing plant in Cheongju, with about two-thirds of the planned spending earmarked for the DRAM project, Bloomberg reported. 

The expansion is aimed at meeting rapidly rising AI-driven memory demand, strengthening production of both high-speed DRAM, which enables low-latency computing, and NAND flash, which provides high-capacity, fast-access storage.

The new Yongin Y2 will be the second of four fabs planned at the Yongin semiconductor cluster, SK Hynix said, and the company intends to break ground on the project in July next year.

The announcement comes weeks after SK Group and Samsung Electronics, as well as the South Korean government, said they would invest $880 billion towards building South Korea’s domestic manufacturing and AI capabilities. The country aims to double its memory production capacity within five years.

SKHY: Other Catalysts, Retail View

Seoul-traded shares in SK Hynix closed down 4.9% on Friday. The move comes after a separate filing that the company will detail shareholder return plans in the third quarter.

“The company is actively reviewing additional shareholder return initiatives as part of its ongoing commitment to enhancing shareholder value,” it said in a statement Friday, according to Bloomberg.

On Stocktwits, the retail sentiment for SKHY was ‘bearish,’ unchanged from the previous day. 

“$SKHY Two days in a row KOSPI gapped at the open just to sell down to a range it's been holding for the last few days.  The positive side is that KOSPI is consolidating in a range regardless of reason,” a trader said.

SK Hynix’s Q2 Recap

The South Korean chipmaker’s second-quarter revenue rose 257% year-over-year and 51% sequentially to 79.32 trillion won ($64.64 billion) and operating profit surged 557% to 60.54 trillion won, according to results issued last week. 

Wall Street analysts had modeled 84 trillion won in revenue, and 64 trillion won in operating profit, according to estimates from LSEG. 

SK Hynix’s first-half revenue topped 100 trillion won for the first time, highlighting strong AI-driven demand. The company sells memory chips and other hardware used in data centers and consumer electronics, and counts U.S. tech giants including Nvidia among its customers.

SK Hynix listed its shares on Nasdaq on July 10 after raising $26.5 billion from U.S. investors.

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