SK Hynix's market value evaporates by $470 billion after thermal cracks appear in its memory chips.

In just over a month, South Korea's SK Hynix lost $470 billion (approximately S$607.2 billion) in market value, transforming from one of the world's hottest artificial intelligence (AI) themed trades into a problem holding in the portfolio.

Shares of the South Korean memory chip giant have plummeted about 38% from their all-time high in June as investors worry about overcrowding in AI-themed trading and a sharp increase in volatility caused by leveraged trading.

During this period, SK Hynix's market value shrank by a margin second only to SpaceX globally.

As the AI ​​boom drives up chip prices, SK Hynix is ​​expected to report another record quarterly result on Wednesday, but investors are becoming increasingly cautious, worried that rising memory chip costs could force users to reduce usage and switch to cheaper alternatives.

Pictet Hong Kong funds have reduced their holdings in SK Hynix in recent weeks. Market analysts point out that the current debate centers on whether memory chip companies are taking excessive profits, and the market hopes to see if any factors will emerge to reverse the perception that "SK Hynix is ​​extracting too much profit from the supply chain."

SK Hynix's ADRs have been under unprecedented scrutiny since their U.S. listing earlier this month . The increasing number of leveraged ETFs linked to the stock, and the resulting volatility, has become a focal point for global markets.

Leveraging its first-mover advantage in high-bandwidth AI memory, SK Hynix's stock price is still poised for another triple-digit gain this year. However, as the sustainability of massive spending by hyperscale cloud service providers faces increasing scrutiny, investors are becoming more cautious about the AI ​​computing hardware sector.

Source: [Lianhe Zaobao] (https://www.zaobao.com/finance/world/story20260728-9430079)