South Korean memory chip giant SK Hynix experienced its worst day in history. On July 13, the company's shares plunged by 15.37%, dragging down the entire country's stock market. At one point, the stock fell to 1,845,000 won — 38% below the June record set on June 25.
The decline was the culmination of a prolonged sell-off that began after a historic rally fueled by artificial intelligence. SK Hynix's market capitalization shrank from approximately $1.25 trillion at its peak to $1.05 trillion, a loss of nearly $200 billion. In July, shares lost 30%, and the current month risks becoming the worst for the company since October 2008.
Mass profit-taking and revision of expectations
Investors began locking in profits after a prolonged rally driven by AI hype. Many market participants are revising their expectations for the growth rate of the memory chip market. SK Hynix's crash continued on the U.S. exchange: shares traded on Nasdaq under the ticker SKHY fell 9% to $154, although on their debut day Friday, they surged more than 14% to $170.
Domino effect: KOSPI triggers protective mechanism
The fall of SK Hynix, dubbed "Korea's Nvidia," triggered a collapse across the entire South Korean market. The KOSPI index plummeted 8.95% to 6,806.93 points, activating the exchange's circuit breaker. The mechanism temporarily halts trading to curb panic selling.
This episode vividly demonstrates how a single company can dictate the dynamics of an entire market. Given SK Hynix's enormous weight in the index, its crash was a key factor in the record drop of the KOSPI.
Cryptalist comment: We are witnessing a classic "buy the rumor, sell the news" scenario in the AI sector. The market overheated on expectations, and now even minor signals of slowing growth trigger avalanche-like sell-offs. For long-term investors, this could be an entry opportunity, but in the short term, volatility will persist.