by Coinstrooper Crypto Articles
Quick Take
  • SK Hynix shares fell 7.74% to 1.288 million won on Thursday.
  • Korean chip stocks sold off after US Democrats won control of Congress, reviving fears of tighter artificial intelligence (AI) rules.
  • The Dow rose 3% on Wednesday, yet the Philadelphia Semiconductor Index fell 3.1% to a six-month low.
  • That leaves holders of Korea’s two largest memory makers exposed to US AI policy.

What Happened

SK Hynix shares fell 7.74% to 1.288 million won on Thursday. Korean chip stocks sold off after US Democrats won control of Congress, reviving fears of tighter artificial intelligence (AI) rules.

The Dow rose 3% on Wednesday, yet the Philadelphia Semiconductor Index fell 3.1% to a six-month low. That leaves holders of Korea’s two largest memory makers exposed to US AI policy.

What Is Seoul Pricing In for SK Hynix?

Market Context

The Korea Composite Stock Price Index (KOSPI) fell 1.98% to 5,570.99 by 9:15 a.m.

Samsung Electronics dropped 5.50% to 206,000 won by 10:01 a.m., TradingView data showed.

The Dow’s 1,500-point jump came as markets priced in a divided government. Barclays said the result likely brings legislative gridlock, LBC reported.

How Much Bad News Was Already in the Price?

TradingView data shows SK Hynix down 29.86% over one month and Samsung down 26.39%. However, SK Hynix is still up 97.70% year to date.

Why It Matters

Korean memory earnings depend heavily on AI data center demand. Therefore, US rules could weigh on Korean chip valuations. The selloff would look overdone if Congress advances none after Jan. 3.

Details

The selloff is tied to fears that the new Democrat-led Congress will tighten rules on AI data centers. Those facilities drive demand for the high-bandwidth memory (HBM) chips that SK Hynix and Samsung supply.

One reading is that traders are pricing a slower data center buildout.

A USC Annenberg survey of 2,980 adults found 78% say government does too little on data centers. That includes 69% of Republicans.

Democrats take control when lawmakers are sworn in on Jan. 3, WBUR reported. In contrast, Yonhap cited no specific bill behind the chip selloff.

SK Hynix closed at 1.487 million won on Oct. 28, after posting record quarterly sales of 104.6 trillion won. Still, the stock now sits about 13% below that close.

On Oct. 25, Goldman Sachs cut its KOSPI target to 9,000 from 12,000. The bank estimated chip valuations implied a 65% drop in 2027 sector earnings and called that pricing excessively pessimistic.

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