TradingKey - During the Asian trading session on October 20, SK Hynix closed down 4.23% at 1.223 million won (equivalent to $922.15), after hitting an intra-day low of 1.183 million won, near a six-month low.

[Source: TradingView]

Based on the closing price of 1.776 million won on September 30, the stock has accumulated a decline of approximately 31.1%. Concerns over returns on AI investments, intensifying competition in memory chips, and controversy surrounding Solidigm's U.S. IPO have all kept the market cautious.

As Microsoft (MSFT), Meta (META), and Amazon (AMZN) continue to increase AI capital expenditures, investors are starting to focus on whether data center investments can translate into sustained profits. Meanwhile, technological progress by Chinese memory chip maker ChangXin Memory Technologies (CXMT) has raised market concerns over intensifying DRAM competition and price trends.

In addition, Lee Chan-jin, Governor of South Korea's Financial Supervisory Service, stated at a parliamentary hearing on October 19 that regulatory authorities believe Solidigm's U.S. listing involves dual-listing restrictions.

Ahn Cheol-soo, a lawmaker from the People Power Party, also posted on Facebook on October 19, urging President Lee Jae-myung to use all public means to block Solidigm's listing.

He contended that the listing could dilute the economic interests of SK Hynix shareholders while SK Group affiliates might benefit, warning that permitting the IPO would harm national interests.

Reuters previously reported that Solidigm is considering an IPO as early as 2027, with market expectations of a valuation up to $150 billion and a fundraising size potentially reaching $15 billion, though the final plan has not been finalized.

Solidigm's revenue in the first half of 2026 was approximately 12.25 trillion won, with a net profit of around 5.84 trillion won. If it introduces external investors through a new share issuance, SK Hynix's economic interests could be diluted; if the market downgrades the valuation of the parent company's equity stake, it could also increase pressure on the stock price. However, the actual impact depends on the issuance method, shareholding ratio, and use of proceeds.

In the short term, SK Hynix's stock price performance will be influenced by Solidigm's IPO plan and South Korean regulatory developments, with the offering structure and shareholder protection arrangements also meriting attention.

In the medium term, price trends for DRAM, NAND, and HBM, returns on AI capital expenditures, and the sustainability of the company's earnings growth will be key factors affecting the stock price.

The stock price being near a six-month low does not imply that the downward trend has ended. Moving forward, close attention should still be paid to shifts in memory chip supply and demand, product prices, and quarterly results to determine whether the current adjustment is abating.

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