Samsung Electronics and SK Hynix posted their steepest single-day declines in months on May 28, falling 13.39% and 14.65% respectively. The drops erased approximately three months of gains for both South Korean chipmakers. The sell-off was triggered by oversupply concerns following Chinese memory maker CXMT's successful listing on May 27, compounded by unresolved doubts about sustained AI investment demand.
Samsung Electronics and SK Hynix Record Double-Digit Losses on May 28
SK Hynix closed at 1.55 million won on May 28, down 266,000 won (14.65%) from the previous session, according to the Korea Exchange. The 14.65% decline marked the stock's second-largest single-day drop in recent weeks, following a 15.37% fall recorded on May 13. The closing price of 1.55 million won represented the lowest level since May 4, when the stock traded at 1.447 million won.
Samsung Electronics finished at 220,000 won, down 34,000 won (13.39%). The 13.39% decline was the company's steepest single-day loss since October 24, 2008, during the global financial crisis, when the stock fell 13.76%. The May 28 closing price of 220,000 won matched the lowest level since April 30, when shares closed at 220,500 won.
The KOSPI index fell 10.84% to close at 6,023.66 as the market capitalization leaders dragged down the broader market.
Foreign Investors Dump 4.8 Trillion Won in Semiconductor Stocks
Foreign investors sold a net 3.2092 trillion won in SK Hynix shares and 1.6341 trillion won in Samsung Electronics on May 28. The combined 4.8 trillion won in net selling reflected a sharp withdrawal from South Korean semiconductor stocks.
CXMT Listing Sparks Memory Oversupply Fears
The mass sell-off occurred as concerns spread about potential memory oversupply from China's Changxin Memory Technologies (CXMT). CXMT successfully listed on China's STAR Market on May 27, raising substantial capital. The company is known to be pursuing aggressive production capacity expansion based on the newly raised funds.
Market participants feared that a significant increase in DRAM supply from CXMT could pressure prices of commodity memory chips, which have driven recent profit growth at Samsung Electronics and SK Hynix. This concern intensified against a backdrop of unresolved questions about the sustainability of AI-related investment demand.
KB Securities Analyst Downplays CXMT Threat to Major Chipmakers
Kim Dong-won, head of research at KB Securities, stated that concerns about CXMT have been overstated. "While CXMT's aggressive production capacity expansion attempts are expected to continue for several years, the possibility that such attempts will lead to overall oversupply in the DRAM market is limited," Kim said.
Kim added, "The impact on Samsung Electronics and SK Hynix's mid- to long-term performance will be even more minimal, as demand will significantly exceed supply and the possibility of Apple adopting Chinese memory is limited."
FAQ
What caused Samsung Electronics and SK Hynix stocks to fall on May 28?
Samsung Electronics fell 13.39% and SK Hynix fell 14.65% on May 28 due to oversupply concerns triggered by CXMT's successful listing on China's STAR Market on May 27. Foreign investors sold a combined 4.8 trillion won in the two stocks as fears spread that CXMT's planned production capacity expansion could pressure commodity memory chip prices.
How did KB Securities assess the CXMT threat to Samsung and SK Hynix?
Kim Dong-won, head of research at KB Securities, stated that CXMT concerns are overstated. He noted that while CXMT's capacity expansion attempts may continue for years, the likelihood of overall DRAM market oversupply remains limited, and the impact on Samsung Electronics and SK Hynix's mid- to long-term performance will be minimal as demand significantly exceeds supply.
