SK hynix fell more than 15 percent in Seoul, the largest one-day decline in the stock's history, after the South Korean brokerage KIS published a second-quarter profit estimate 8 percent below consensus, and the damage crossed the Pacific fast: 24/7 Wall St. reports Micron, SanDisk and Western Digital each dropped 6 percent, with Seagate off 4 percent.
The KIS estimate cited slower-than-expected HBM4 shipments and a heavy reliance on HBM contracts. Read that carefully. Long-term HBM supply agreements have been the memory bull case's proudest exhibit, sold as revenue visibility. KIS inverted the frame: the same contracts concentrate the business on one product line and a handful of customers, so any slip in HBM4 cadence flows straight through the profit line with nothing to cushion it.
Run the year-to-date numbers and the violence of the reaction explains itself. Micron entered the session up 243 percent on the year, Western Digital up 238 percent, Seagate up 231 percent, and SanDisk up 707 percent, per the same report. Stocks priced like that carry no allowance for execution slippage. An 8 percent estimate gap is a rounding error in an ordinary cycle; at these levels it reads as a warning about the thesis itself.
Contagion had structural help. The KOSPI fell 9 percent, enough to trigger a 20-minute trading halt, and the Roundhill Memory ETF slid 9 percent to $57.52. Samsung, SK hynix and Micron make up 73 percent of that fund's assets, so a Korea-led selloff mechanically becomes a US memory selloff before any American investor forms a view.
None of the day's fundamentals actually moved. Micron's most recent quarter showed $41.5 billion in revenue, up 346 percent year over year, at an 85 percent gross margin, with guidance of roughly $50 billion for the coming quarter. SanDisk grew revenue 251 percent to $5.9 billion and now runs a zero-debt balance sheet. Citi reaffirmed its Buy on Western Digital with an $800 target before the selloff, per 24/7 Wall St. The dispute KIS opened is about timing and estimates, not demand. In a market this crowded, timing is the whole game.
What matters from here is whether HBM4 shipment data validates the caution or buries it. Estimate trims that prove wrong get reversed in a quarter; the positioning damage from a record one-day drop takes longer to unwind.
Bootnote: the fall came days after SK hynix's celebrated Nasdaq debut, which followed the share sale that raised as much as $36 billion for its fab program. Listing at the top of your own euphoria is an old industry tradition, and the memory sector observes its traditions faithfully.
Leave a Reply