SEOUL, August 9, 2026, 07:07 KST
- Shares in Seoul finished at 1,422,000 won, marking a 17.2% decline for the week. The U.S.-traded ADR settled at $137.91.
- The 54.3 trillion won proposal does not schedule any additional cleanroom until after December 2028.
- The regular market in Seoul is shut on Sunday. Trading will resume with the next normal session at 09:00 KST on Monday.
SK hynix Inc. (KRX:000660; NASDAQ:SKHY) has authorized an investment of 54.3 trillion won, equivalent to $38.3 billion, to build two semiconductor facilities in South Korea. The investment is substantial. However, it does not translate to an immediate boost in supply.
The earliest cleanrooms are scheduled for completion in December 2028 and June 2029. As a result, the sanctioned developments will not contribute new production within the upcoming two years. This refocuses the key issue for investors from additional supply to decisions about how to allocate cash.
The statements were released following the regular close at 15:30 KST on Friday. U.S. ADRs finished the session 3.9% lower at $137.91. The KRX will see the first complete session response on Monday.
This week’s closing figures indicate a pronounced local shift. All changes reflect reporter calculations from July 31 to August 7, with no currency adjustment.
| Instrument | July 31 close | August 7 close | Weekly change |
|---|---|---|---|
| SK hynix Seoul shares | ₩1,718,000 | ₩1,422,000 | -17.2% |
| SK hynix U.S. ADR | $143.73 | $137.91 | -4.0% |
| Samsung Electronics Co. KRX:005930 | ₩262,500 | ₩231,000 | -12.0% |
| Micron Technology Inc. NASDAQ:MU | $823.03 | $877.57 | +6.6% |
| KOSPI | 6,595.45 | 6,258.77 | -5.1% |
SK hynix trailed both Samsung and the KOSPI, while Micron traded in the opposite direction. The divergence indicates that concerns over payouts added to the wider market decline in Korea.
The projects have a lengthy timeline. Investment is split between DRAM-driven AI memory and NAND storage.
| Project | Approved spending | Construction start | First cleanroom | Planned products |
|---|---|---|---|---|
| Yongin Y2 | ₩35.2 trillion | July 2027 | June 2029 | HBM and advanced DRAM |
| Cheongju M17 | ₩19.1 trillion | February 2027 | December 2028 | NAND flash memory |
| Total | ₩54.3 trillion | — | — | — |
SK hynix’s initial second-quarter results highlight that funding might not be the primary limitation. Operating profit stood at 60.54 trillion won. Cash reserves totaled 88 trillion won, with net cash at 69.4 trillion won. The company also commenced HBM4 mass shipments in the quarter.
The scale shown below does not represent a cash-flow projection. Expenditure extends through 2031, and the quarterly data are still subject to revision.
| Reference measure | Value | ₩54.3 trillion as percentage |
|---|---|---|
| Q2 cash and equivalents | ₩88.0 trillion | 61.7% |
| Q2 net cash position | ₩69.4 trillion | 78.2% |
| Preliminary Q2 operating income | ₩60.54 trillion | 89.7% |
| Market value as of August 7 | ₩1,038.76 trillion | 5.2% |
This intensifies the debate over payouts. SK hynix and Samsung now aim to deliver returns equivalent to 50% of free cash flow. In June, Micron committed to return 100%.
Portfolio manager Richard Clode described a 50% policy as an “incredibly inefficient balance sheet.” He pressed SK hynix to boost returns to no less than 80%. The company responded that it is able to raise payouts and still maintain investment and financial stability. Reuters
The filing on Friday announced plans for more return initiatives in the third quarter. It also set a dividend of 375 won per share. That dividend now serves as the immediate catalyst. The newly planned fabs remain several years away.
U.S. analysts continue to express optimism even after the recent decline. Among 14 analysts, the consensus is Strong Buy, with an average price target set at $244.92. This suggests a potential gain of 77.6% over Friday’s ADR closing price.
| Brokerage | August recommendation | ADR target | Upside from $137.91 |
|---|---|---|---|
| Rosenblatt Securities | Buy-equivalent | $320 | 132.0% |
| Cantor Fitzgerald | Buy-equivalent | $300 | 117.5% |
| Needham | Buy-equivalent | $200 | 45.0% |
| Wolfe Research | Buy-equivalent | $200 | 45.0% |
| William Blair | Buy-equivalent | Not specified | — |
William Blair analyst Sebastien Naji pointed to “an unprecedented level of revenue and free cash flow growth.” He attributed this to sluggish supply expansion. SK executive Kim Chun-sung stated that competitiveness was “no longer determined by the performance of individual memory products alone.” William Blair
Execution remains crucial. Preliminary second-quarter operating profit fell short of the 64 trillion won consensus estimate. Revenue was also below the projected 84 trillion won. Analysts said this was partly due to slower HBM4 shipments and postponed revenue recognition.
The initial focus in the coming week is Monday’s response from KRX. Applied Materials Inc. NASDAQ:AMAT will release fiscal third-quarter earnings on Thursday, offering insight into demand for equipment in the sector. Investors are also awaiting further information on SK hynix’s third-quarter payout scheme.
Risks: Earnings and valuation could face headwinds if HBM4 scaling is delayed, AI-related spending falls short, competitors grow supply more rapidly, or if payout figures underwhelm. Thursday’s Nextrade flash crash highlighted how minor trades may intensify local price swings.
Related articles: NASDAQ:SKHY
