SK Hynix Drops 15.6 Percent on ADR Switch Trade as KOSPI Halts Amid Passive Institutional Selling

The plunge followed the Friday debut of SK Hynix ADRs under ticker SKHY. Local shares dropped to 1.845 million won while ADRs fell nearly 9 percent in premarket. KOSPI declined as much as 9 percent before a 20-minute trading halt, extending its correction from June peaks beyond 20 percent. Memory peers including Samsung Electronics fell 10 percent.

Data from Goldman and UBS show the selling was overwhelmingly passive. Foreign program trading accounted for $1.18 billion of outflows while local institutions liquidated $1.5 billion, largely ETF-related. Retail investors bought the dip with $730 million in net purchases in the broader tech sector. This marked the first day domestic demand failed to absorb foreign sales after months of one-sided absorption.

The move aligns with concentrated semiconductor exposure to AI narrative flows. SK Hynix derives the bulk of its valuation premium from HBM supply for US hyperscalers. US export controls on advanced memory to China and pending Dutch restrictions on ASML tools create asymmetric downside when passive vehicles reprice exposure simultaneously across Seoul and New York listings.

Next catalyst is ASML's Wednesday earnings. A guidance upgrade could stabilize the trade; a miss would likely extend the unwind into Taiwan Semiconductor and broader Asia tech indices within the same week.