SEOUL, July 24, 2026, 21:20 (KST) — SK Hynix (KRX:000660) suffered a severe blow on Friday, closing at 1,759,000 won, down 8.34% from the previous session. The sharp decline erased approximately 114 trillion won in market capitalization, far exceeding the 944 billion-won payout ordered by the Seoul High Court against SK Group Chairman Chey Tae-won.
The court ruling, which reduced an earlier 1.38 trillion-won judgment, allows Chey to pay the sum in cash while retaining his shareholdings. However, the market reaction appeared disproportionate to the legal development, suggesting that broader factors were at play.
Market Context
The broader KOSPI index dropped 5.72% on Friday, marking its fifth consecutive weekly decline. Samsung Electronics (KRX:005930) fell 7.59%, while SK Inc. (KRX:034730) and SK Square (KRX:402340) lost 3.82% and 9.17%, respectively. The sell-off was driven by a confluence of headwinds, including a nearly 40% surge in oil prices in July, rising bond yields, and growing skepticism about the returns from massive AI infrastructure investments.
South Korea's financial regulator also moved to tighten leveraged ETF requirements, bringing forward the effective date to July 31. Individual investors will now need to deposit at least 30 million won to trade these products, which have been criticized for amplifying market swings, particularly in stocks like SK Hynix and Samsung Electronics.
Comparative Performance
SK Hynix's decline of 8.34% was 0.75 percentage points worse than Samsung's 7.59% drop, and 2.62 points behind the KOSPI's 5.72% fall. After gaining 4.2% from July 16 through Thursday, the stock ended the week with a net loss of 4.5%. The KOSPI fell 1.9% over the same period.
The widening gap between SK Hynix and Samsung suggests company-specific concerns are weighing on the memory chipmaker. If the divergence persists, it could indicate issues unique to SK Hynix, such as weaker memory pricing or the unwinding of leveraged ETF positions. Conversely, a narrowing gap would support the theory that the sell-off was primarily driven by forced deleveraging.
Ownership Structure
Chairman Chey does not hold a direct stake in SK Hynix. His 17.9% ownership in SK Inc., which controls 32% of SK Square—the main shareholder of SK Hynix—provides an indirect link. The correlation between SK Hynix's share price and those of Samsung and SK Square was notably stronger than with SK Inc., underscoring the market's focus on sector and leverage dynamics.
Outlook and Risks
SK Hynix is scheduled to report its second-quarter earnings on July 29 at 09:00 KST. The results will be closely watched for guidance on memory pricing, demand for high-bandwidth memory (HBM), and cost control. A strong earnings beat could trigger a significant rebound, while disappointing numbers might exacerbate the sell-off.
Key risks include further weakness in memory prices, the potential for additional unwinding of leveraged ETFs, and the possibility of an appeal in the legal case. The market's ability to stabilize will depend on whether the current decline is a temporary correction or the start of a more prolonged downturn.
