SK Hynix Falls Nearly 40% From Peak; Chairman Choi Tae-won Urges Investors to Hold: 'AI Is Like a 4-Year-Old—It Needs Memory to Grow'

According to a report by Cailianshe, memory chip stocks have surged over the past year amid the rising AI boom. However, in recent weeks, these stocks have faced sharp sell-offs as investors increasingly question the sustainability of massive capital expenditures in the AI sector. South Korean memory chip giant SK Hynix, in particular, has seen its share price fall nearly 40% from the record high it reached last month.

In response to the sharp stock decline, SK Group Chairman Choi Tae-won personally addressed the market on Friday (17th). He stated that given the continued growth in market demand for memory chips, SK Hynix's stock price will maintain an upward trend in the long term, and urged investors to hold their shares rather than chase daily market fluctuations.

Speaking at the Jeju Forum hosted by the Korea Chamber of Commerce and Industry (KCCI), Choi said, 'I don’t know how high the stock price will go next month. Holding for the long term is a better way to preserve wealth than frequent buying and selling.'

Choi, who also serves as chairman of the Korea Chamber of Commerce and Industry, expressed confidence based on the long-term outlook for the memory semiconductor industry at the heart of the AI boom. He believes that as the AI industry continues to evolve, demand for memory chips will keep rising, and he remains highly confident in SK Hynix’s long-term growth prospects.

'AI is like a 4-year-old right now,' he said, 'but to grow into an adult, it inevitably needs memory.' He added that memory demand 'will only grow exponentially.'

However, Choi acknowledged that SK Hynix's stock did rise too quickly as investors eagerly embraced AI-related business opportunities, frankly admitting that 'sometimes the market runs ahead of reality.'

'When expectations improve, the stock goes up; when optimism fades, it falls. Because it rose too fast before, sometimes reality just needs time to catch up,' he said.

SK Hynix is part of the SK Group. Recently, the company listed on Nasdaq via American Depositary Receipts (ADRs), raising the second-largest amount in U.S. stock offering history, only behind SpaceX.

On Thursday, SK Hynix shares fell 11.53% in South Korea, closing at 1.842 million won. Fueled by the AI boom, the stock had surged nearly sixfold over the past year, but has experienced extreme volatility in recent weeks. South Korean markets were closed on Friday due to a national holiday.

Notably, at the time of Choi’s remarks, significant capital has been flowing into leveraged ETFs linked to SK Hynix, further amplifying stock price swings. In response, South Korean regulators have stepped in to address the乱象 in chip-related leveraged ETFs, announcing a series of measures on Thursday—including raising margin requirements—to curb excessive market speculation.