SK Hynix Stock Falls Nearly 40% from Peak; Chairman Choi Tae-won Reaffirms: Memory Demand Will Continue to Grow

The artificial intelligence (AI) boom has driven memory chip stocks sharply higher over the past year, but recent concerns about the sustainability of AI-related capital spending have triggered a significant market correction. According to a report by Cailianshe, South Korea's memory giant SK Hynix has seen its stock price fall nearly 40% from its historical high last month, testing investor confidence.

In response to the sharp stock decline, SK Group Chairman Choi Tae-won personally addressed the market on the 17th, emphasizing that memory chip demand will continue to grow in the long term. He stated that SK Hynix's stock price will eventually trend upward over time and urged investors not to chase daily market fluctuations.

Speaking at the Korea Chamber of Commerce and Industry's Jeju Forum, Choi said, "I cannot predict how high the stock price will go next month, but from a long-term demand perspective, the memory industry still has solid support."

He added, "Rather than frequently buying and selling, long-term holding is a better way to preserve wealth." Choi expressed confidence in SK Hynix's long-term outlook, citing memory semiconductors as central to AI development. As the AI industry continues to grow, demand for memory will keep rising.

Choi likened AI to "a 4-year-old child today, but it cannot grow into an adult without memory." He further stated that memory demand will grow exponentially in the future.

However, Choi acknowledged that investor enthusiasm for AI opportunities caused SK Hynix's stock to rise too quickly, noting that markets sometimes "run ahead of reality." He explained that when market expectations improve, stock prices rise; when investors turn cautious, prices fall. Due to the previous rapid gains, it takes time for fundamentals to catch up, contributing to recent volatility.

SK Hynix plunged 11.53% on the Korean stock market on the 16th, closing at 1.842 million won. Fueled by the AI theme, the stock had surged nearly sixfold over the past year, but volatility has intensified in recent weeks. The Korean stock market was closed on the 17th due to a national holiday.

Notably, large amounts of capital have recently flowed into leveraged ETFs tracking SK Hynix and other chip stocks, further amplifying price swings. South Korean regulators have announced measures such as raising margin requirements to curb excessive speculation. Choi reiterated that memory demand remains strong and that short-term fluctuations should not obscure the long-term growth trend.