Technology stocks came under heavy pressure on Monday after SK Hynix suffered its biggest one-day share price decline on record, triggering a broad selloff across the global semiconductor sector as investors reassessed valuations and growing geopolitical risks.
The retreat began in Asia before spreading to Europe and U.S. premarket trading, weighing on chipmakers despite continued optimism over long-term demand for artificial intelligence hardware.
SK Hynix Leads Sharp Decline
SK Hynix shares plunged more than 15% in South Korea, marking the largest single-day drop in the company’s history.
The move reflected widespread profit-taking after a powerful rally that culminated in the memory chip manufacturer’s Nasdaq debut last week.
Losses in SK Hynix, combined with declines in Samsung Electronics (USOTC:SSNHZ), pushed South Korea’s KOSPI index down 9%, prompting the Korea Exchange to suspend trading for 20 minutes.
European Chipmakers Join the Selloff
Weakness quickly spread to European semiconductor stocks during the opening session.
ASMI (EU:ASM), ASML (EU:ASML) and Besi (EU:BESI) traded between 1% and 2% lower by 04:46 ET (08:46 GMT).
France’s STMicroelectronics (EU:STMPA) also declined around 1%, while Germany’s Infineon (TG:IFX) fell approximately 2%.
U.S. Semiconductor Stocks Point Lower
The negative sentiment extended into U.S. premarket trading.
Western Digital (NASDAQ:WDC) dropped 6.5%, Micron (NASDAQ:MU) lost 5.4%, while SanDisk (NASDAQ:SNDK) fell almost 7%.
Seagate (NASDAQ:STX) retreated 5%, and both AMD (NASDAQ:AMD) and Intel (NASDAQ:INTC) traded nearly 3% lower.
Profit-Taking Follows Nasdaq Debut
The selloff comes only days after SK Hynix completed a blockbuster U.S. listing.
The company raised more than $26 billion through the sale of American Depositary Receipts priced at $149 each after its Seoul-listed shares had more than tripled in value this year.
The ADRs opened 14% above the offer price at $170 before ending their first trading session with a gain of 12.8%.
“The current memory upcycle is tracking substantially stronger than expected, but our base case continues to assume normalisation in cycle dynamics, limiting upside at current levels,” said Lorraine Tan, a director at Morningstar.
AI Optimism Meets Valuation Concerns
SK Hynix has been one of the biggest beneficiaries of booming demand for high-bandwidth memory chips used in artificial intelligence data centres.
However, the stock’s sharp rise has also resulted in increased volatility as leveraged exchange-traded funds amplified both gains and losses.
Monday’s decline illustrates that while demand for AI infrastructure remains robust, investors are becoming increasingly selective as semiconductor valuations continue to climb.