Nvidia supplier falls after Korea's stock exchange triggers 'investment alert' mode

Quotes of South Korean SK Hynix, the main supplier of high-speed memory chips for Nvidia's AI chips, fell sharply in Seoul trading. The market was reacting to the Korean Exchange's ban on buying SK Hynix securities with leverage, designed to curb speculative excitement over news of SK Hynix's possible entry into the stock exchange in New York.

On December 11, the Korea Exchange announced an "investment alert" (Investment Alert) on SK Hynix shares, Bloomberg reports. This measure prohibits buying securities using margin lending - money borrowed from brokers - and obliges investors to fully pay for transactions from their own funds. Also Investment Alert assumes that if quotes grow by at least 40% or more during two sessions, trading in securities will be suspended for one day. In addition, while the Investment Alert is in effect, SK Hynix shares will not be available for transactions on the pre-market and post-market, the agency notes with reference to the South Korean site Nextrade.

SK Hynix shares fell by 3.1%, later recovering some of their losses. At the same time, their value has more than tripled since the beginning of 2025 due to the demand for memory chips for AI and the struggle of South Korea's financial authorities with the "Korean discount " - the undervaluation of the country's stock market compared to global peers.

"In stocks like Hynix, where retail margin speculators have been actively entering, inflating trading volumes, switching to no-margin mode has a very noticeable impact on price dynamics," Bloomberg quoted Clepsydra Capital analyst Pak Sankhen as saying.

In a publication on the Smartkarma platform, Sangchen expressed doubts that SK Hynix will decide on a secondary listing in the United States. The company is now focused on raising funds from a new Korean state fund - this will help avoid dilution of shareholder stakes and protect the "already shaky" corporate control structure, the expert said.

In November-December 2025, the Korea Exchange issued two Investment Caution warnings on SK Hynix shares. The reason was the rapid growth of the Nvidia supplier's quotations amid the AI boom. SK Hynix shares got a boost this week after the company confirmed that it is exploring the possibility of listing in New York.

This article was AI-translated and verified by a human editor