Key Takeaways:
A Korean media report that SK Hynix is slowing HBM4 expansion due to Nvidia Rubin production cuts triggered a global semiconductor sell-off that erased more than $200 billion in market value.
SK Hynix Inc. is delaying its sixth-generation high-bandwidth memory (HBM4) production ramp and reallocating resources to general DRAM, a strategic pivot that sent memory stocks plunging more than 13% on Tuesday and triggered a 10% crash in South Korea's KOSPI index.
"SK Hynix management sees no urgency to accelerate the HBM4 line conversion given that Nvidia's Rubin chip production forecasts keep getting revised down," a person familiar with the company's internal discussions told Korean media, speaking on condition of anonymity.
The sell-off was broad and deep. Micron Technology Inc. fell 13%, Western Digital Corp. dropped 8.4%, and SanDisk Corp. slid 11% in U.S. trading. The Roundhill Memory ETF (DRAM) crashed 14%. South Korea's KOSPI, where memory stocks account for about 60% of index weight, fell more than 10% and triggered a 20-minute trading halt.
The pivot reflects a fundamental shift in memory economics: general DRAM operating margins now exceed HBM margins by more than 15 percentage points, with Daishin Securities estimating general DRAM margins could peak at 90% this year. SK Hynix's decision to prioritize DDR5 supply — including a three-year contract with Microsoft Corp. — suggests the company sees better near-term returns in the commodity memory market than in bleeding-edge AI memory.
General DRAM Margins Outpace HBM as AI Demand Questions Mount
The margin inversion is reshaping SK Hynix's capital allocation. The company's DRAM average selling price has climbed to the mid-60% range, and Morgan Stanley projects DRAM ASPs will rise 62% by 2026, prompting the bank to raise its SK Hynix earnings forecast by 56% to 63%. Goldman Sachs maintains that SK Hynix can sustain its dominant HBM3 and HBM3E market share above 50% through 2026, making an aggressive HBM4 push less critical in the near term.
But the slowdown also opens a window for competitors. Samsung Electronics Co., which has been generating strong profits from general DRAM, is expected to begin HBM4 mass production in the second half of this year. Counterpoint Research estimates SK Hynix's HBM market share could narrow from 57% in the fourth quarter to between 50% and 60% if Samsung executes on schedule.
Rubin Uncertainty Pressures the AI Supply Chain
The HBM4 pullback is the latest sign of strain in the high-end AI infrastructure buildout. Nvidia Corp.'s next-generation Vera Rubin rack systems, which rely on HBM4 memory, face rising costs as memory prices surge, squeezing hyperscaler margins. The production forecast downgrades cited by SK Hynix's source suggest that even Nvidia — the dominant beneficiary of AI spending — is adjusting its expectations for the next product cycle.
Wedbush analysts described Tuesday's sell-off as a buying opportunity, arguing that enterprise AI demand remains strong. "We disagree with the view that the AI trade is overheated," Wedbush said in a note, maintaining a bullish stance on memory stocks. Micron is scheduled to report fiscal third-quarter earnings on Wednesday, a report that will provide the next major data point on whether the AI memory cycle is peaking or merely pausing.
This article is for informational purposes only and does not constitute investment advice.
