SK Hynix's American Depositary Receipts (ADR) fell over 7% due to heightened competition concerns following the IPO of Chinese memory chipmaker Changxin Memory Technologies (CXMT) and weakened investor sentiment linked to Nvidia.
On July 27, SK Hynix's ADR closed at $143.02, down $11.50 (7.44%) from the previous trading day. This marked the first time the stock price fell below its IPO price of $149, set on July 10.
The stock opened at $159.61 and briefly rose to $164.30, gaining over 6% at one point. However, it later reversed course, dropping to as low as $139.10, a decline of 15.3% from its intraday high.
CXMT's successful market debut has put pressure on the stock prices of existing memory semiconductor companies.
On its first day of trading on the Shanghai Stock Exchange, CXMT's shares surged 466% to close at 49 yuan, significantly above its IPO price of 8.66 yuan. The company's market capitalization reached approximately 3.3 trillion yuan, making it the largest company by market cap on the mainland stock market.
CXMT raised 57.92 billion yuan through this initial public offering (IPO), with plans to use the funds for expanding production capacity, improving manufacturing technology, and research and development. Concerns are growing that such large-scale expansions could intensify competition in the global DRAM market.
CXMT is now the fourth-largest DRAM manufacturer in the world, following Samsung Electronics, SK Hynix, and Micron, with an estimated market share of about 9% based on shipments earlier this year.
Other memory-related stocks listed in the U.S. also experienced declines. Micron Technology fell 2.20%, while data storage company SanDisk dropped 11.02%.
Nvidia's stock decline further dampened investor sentiment in the semiconductor sector. Nvidia closed at $196.51, down 5.07% from the previous day.
The Wall Street Journal reported that Nvidia is negotiating a financial guarantee of approximately $250 billion for OpenAI's large-scale data center project. This structure does not involve direct investment from Nvidia but rather guarantees rental payments and financing for the data center. Concerns have been raised in the market that such a large guarantee could increase Nvidia's financial risks.
* This article has been translated by AI.
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