Micron and other chip stocks feel the pain of imported volatility - blame SK Hynix

By Britney Nguyen

The SOX chip index was suffering a unanimous selloff, after SK Hynix's stock had its worst day in 18 years in South Korea trading

U.S. memory chip stocks were falling Monday morning following a steep decline for SK Hynix's stock in South Korea.

Shares of Micron Technology, along with those of other memory-chip makers, sank Monday, as a historic decline in rival SK Hynix's stock in South Korea triggered broad selling in semiconductor stocks on Wall Street.

The tumble in SK Hynix's stock (KR:000660), amid worries about rising Middle East tensions, comes one trading session after its high-profile new listing in the U.S. on Friday, which saw the stock shoot up 12.8% in its debut. That enthusiasm proved short-lived, however, as the South Korea-based memory-chip maker's stock dropped 15% on the local exchange on Monday, the biggest one-day drop in 18 years. The U.S.-listed shares (SKHY) shed 9.3% on Monday.

While the U.S. listing gives investors exposure to what's been one of the hottest stocks in the world this year, in one of the hottest stock markets, there is also a downside to that exposure in the current environment.

D.A. Davidson managing director Gil Luria noted the recent volatility in South Korean stocks, "especially because of active retail investors and the two largest stocks being memory related." Shares of Samsung Electronics (KR:005930) ended the day down 10.7% in South Korea.

"Now that two of the largest stocks in the U.S. are memory related and one of them is Korean, we may start to import some of that volatility every morning," Luria told MarketWatch in emailed comments, referring to SK Hynix ADR and Micron.

Micron's stock (MU) fell 4.4% on Monday, and has shed more than 20% since closing at a record $1,213.56 on June 25. Shares of fellow memory-chip maker Sandisk (SNDK) dropped 12.6%.

Those declines were part of a broader chip-sector selloff, as the PHLX Semiconductor Index SOX declined 4.8% with all 30 components losing ground.

Also in the sector, Nvidia's stock (NVDA) dropped 3.5%, while Broadcom's (AVGO) fell 4%. Shares of Advanced Micro Devices (AMD) lost 4.2%, Intel (INTC) shares slid 6.1% and Marvell Technology's stock (MRVL) gave up 7.8%.

Nic Puckrin, founder of Coin Bureau, shared a view similar to that of D.A. Davidson's Luria, that the U.S. and South Korean markets "are becoming more intertwined than ever before, feeding off each other's tech concentration."

In his view, equity investors should be worried about the circular action, he said in emailed comments.

South Korea's benchmark Kospi index KR:180721 fell 9% on Monday and has dropped 25% from its record close reached on June 22, but was still up 61.5% in 2026 versus the S&P 500 index's SPX 10.3% gain this year.

Puckrin attributed SK Hynix's plummet on Monday to a note from analysts at investment firm Korea Investment & Securities who expect the company to miss consensus estimates for its operating profit in its upcoming second-quarter earnings report. Still, the analysts expect growth in that area, he added.

"This shows just how irrational investor expectations are becoming, and that sets a dangerous precedent," Puckrin said, adding that SK Hynix is vulnerable given how heavily retail investors drive the South Korean stock market.

Looking forward to second-quarter earnings for U.S. companies, he said, "any miss could turn into a double-digit selloff."

While the SK Hynix ADR gives U.S. investors more opportunity to buy into the memory boom, Zacks Investment Management chief market strategist Brian Mulberry said there's a "sheer amount of liquidity" being pulled from the market by the ADR and SpaceX's recent initial public offering.

"That means once investors make an allocation it is reasonable to see that it will stagnate for a while causing volatility with lower volumes of shares traded," he said in emailed comments.

That volatility is being "amplified" on Monday due to geopolitical pressures.

-Britney Nguyen

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07-13-26 1626ET