SK Hynix Shares Drop 9% After Goldman Sachs Downgrade on HBM Competition Worries

SK Hynix Inc. (KS:000660) shares plunged nearly 9% to 270,000 won on Thursday after Goldman Sachs downgraded the stock to Neutral from Buy, citing concerns over intensifying competition in the high-bandwidth memory (HBM) chip market. The downgrade contributed to a 0.5% decline in South Korea’s KOSPI index.

Goldman Sachs maintained a target price of 310,000 won but flagged a dimmer outlook beyond 2025. While SK Hynix remains a leader in advanced HBM chips—used primarily in AI processors and supplied extensively to Nvidia (NASDAQ:NVDA)—the investment bank warned that the firm’s technological lead could narrow by 2026 as rivals close the gap. Oversupply concerns are expected to pressure HBM chip prices, with Goldman forecasting double-digit percentage price declines that could erode SK Hynix’s profit margins.

Despite expectations of strong earnings growth in 2025 driven by robust AI and memory chip demand, the outlook for 2026 appears less promising. The downgrade coincided with broader market concerns following a cautious forecast from ASML Holding NV (AS:ASML), a key supplier of chipmaking equipment. ASML warned that U.S. trade policy uncertainty was delaying investment in chip fabrication tools, though it reported stronger-than-expected Q2 bookings fueled by AI demand.

The news arrives just ahead of Taiwan Semiconductor Manufacturing Co. (NYSE:TSMC) earnings, another major indicator of chip sector health. While SK Hynix has surged roughly 73% year-to-date in 2025 thanks to AI-driven momentum, the latest downgrade underscores the long-term risks in an increasingly competitive memory chip landscape.

In contrast, shares of rival Samsung Electronics Co. Ltd. (KS:005930) rose 1.7% on Thursday, highlighting a divergence in investor sentiment between Korea’s top chipmakers.