SK Hynix Denies Intel Wafer Fab Acquisition, Why Did Stock Price Fall?

The Barron's reported that SK Hynix ADR shares fell on Wednesday (22nd) after the South Korean memory chip manufacturer denied reports of acquiring Intel's (INTC-US) factory. For investors who have recently experienced volatile stock movements, the after-hours earnings report from Alphabet (GOOGL-US) released the same day may be of greater interest.

SK Hynix ADR closed down 3.9% at $165.27 on Wednesday. The day before, it had surged 13.8%, driven by a broader rally in semiconductor stocks.

SK Hynix's South Korean shares closed down 0.3% on Wednesday, after rising as much as 9% during intraday trading.

Investors reacted to SK Hynix's denial of the acquisition news. According to the Korea JoongAng Daily, SK Hynix had been in talks with Intel to acquire its Ohio, U.S.-based wafer fabrication campus, which is still under construction.

However, SK Hynix filed a statement with the Korea Exchange on Wednesday stating that the company "has not pursued or decided to acquire Intel's Ohio facility," while noting that "it is currently evaluating various investment and acquisition opportunities."

An Intel spokesperson told Barron's, "Intel remains committed to its investment plan in Ohio and continues to invest to accelerate site preparation for the campus construction." Intel's stock closed down 2.7% at $102.62 on Wednesday.

South Korean investors are already familiar with SK Hynix's rollercoaster-like stock movements. Over the past six months, the company's stock has risen over 140%, but it has fallen 37% in the past month alone. Since its ADR listing in New York earlier this month, SK Hynix's ADR has risen only about 2%, giving U.S. investors a taste of its volatile price swings.

SK Hynix's next move may depend on Alphabet's earnings report released after Wednesday's market close. The market is closely watching Google's outlook on AI spending, as it will directly impact the demand outlook for memory chip manufacturers. There is ongoing concern in the market about whether chip prices have reached unsustainable levels, and SK Hynix itself has expressed similar concerns.