Despite Record-High Earnings, SK Hynix Triggers Circuit Breakers for a Second Straight Day Amid Market Confidence Collapse Fears

The KOSPI fell as much as 7.6% intraday to around the 5,560 level, while the KOSDAQ dropped 7.8%-8% to below the 650 mark. During the session, the KOSDAQ's decline exceeded 8%, triggering a circuit breaker, and the KOSPI subsequently fell more than 8% as well, triggering its own circuit breaker — an unusual situation in which both markets halted trading for the second consecutive day.

The won weakened by 2.70 won against the previous session to around 1,145 per dollar. Foreign investors opened as net buyers in the KOSPI cash market before turning to net selling, while foreign futures positions showed roughly 160 billion won of buying in KOSDAQ futures and about 570 billion won in KOSPI futures.

Total KOSDAQ trading value stood at 3.8 trillion won, while trading in the single inverse ETF tracking SK Hynix alone reached 3.3 trillion won — an anomaly in which more capital was betting on a decline in Hynix than the entire market's total turnover.

Major Asian indices moved in the opposite direction: Hong Kong's Hang Seng Index rose about 1.6%, while Shanghai's Composite Index slipped only 0.1%, suggesting that the sharp declines in the KOSPI and KOSDAQ were a domestic-market-specific issue rather than a regional trend.

SK Hynix reported second-quarter operating profit of 60.5426 trillion won and revenue of 79.3 trillion won, both record highs. However, both figures fell short of market consensus of 83.9 trillion won in revenue and 63.9 trillion won in operating profit. The operating margin came in at 76%, and net profit reached 93 trillion won, with the net margin soaring to 118% due to gains from the sale of an SK Hynix equity stake.

On the earnings call, the company said it plans capital expenditure (capex) in the high-40-trillion-won range for 2026 and will continue investment in production sites including Cheongju and Yongin. On long-term supply agreements (LTAs), management offered only a general response, saying it had secured key customers and was discussing additional contracts. HBM saw an increase in mass production starting in the second quarter, DRAM supply of Kamto products is ramping up, and there were remarks on 321-layer NAND, though nothing new was disclosed.

On shareholder return policy, management gave only a general answer, saying it would 'review the matter from multiple angles,' and offered no specifics on whether LTAs are structured with downside protection and open upside, or on how the company would respond to price volatility. Following the earnings call, shares plunged 10%-11%.

Market participants noted the reaction to the earnings appeared excessive. SK Hynix's price-to-book ratio (PBR) stands at around 3x, and some observed that despite being one of the world's most profitable companies, none of the positive news was being reflected in its stock price. Concerns were raised that Samsung Electronics, which is scheduled to report earnings the following day, should avoid a repeat of similar shareholder communication issues.

Reports emerged that Nvidia will halve the memory capacity of its next-generation server rack, 'Vera Rubin,' due to the cost burden of memory. The reasoning cited was that memory prices are too high to allow for larger capacity, and the news was treated as raising potential demand concerns tied to the earnings of memory makers including SK Hynix.

The U.S. Federal Communications Commission (FCC) announced an import ban on mobile robots, including humanoid and quadrupedal robots. While China was not explicitly named, the move was interpreted as targeting Chinese-made robots and components, and domestic robotics-related stocks such as Angel Robotics and TXR Robotics posted double-digit gains as a result.

The view emerged that the U.S. and China are now competing for next-generation dominance in robotics, following semiconductors, and that within this bloc-based structure, Korea could benefit as part of the U.S.-aligned camp. However, China's Unitree Robotics released footage showcasing its quadrupedal robot navigating rough terrain, demonstrating its technological capability, and with Unitree slated for an IPO within the year, related news flow is expected to continue.

Professor Kim Kyung-il of Ajou University's Department of Psychology appeared to offer advice on managing investor psychology amid the market crash. He explained that how one offers comfort should vary with closeness to the other person: with very close friends, lightening the mood with humor can be more effective, while with more distant relationships, a more careful, measured form of comfort is appropriate.

He stressed that because rational decision-making is impossible in a state of panic, investors should simply turn off their screens. He said the root cause of panic trading is that smartphones have become almost an extension of the body, constantly prompting reactions to second-by-second price swings, and recommended trading only via desktop or forcibly disconnecting from price checks for two-hour blocks.

He explained that the typical psychological reaction following a loss is regret, which in turn triggers an impulse to act contrary to one's prior stance (i.e., panic selling) in an attempt to undo it. Citing related research, he noted that investors primed with the suggestion that 'the market is always changing' tend to favor reliable information and reliable investors, whereas the fixed belief that 'the market is a gambling table' instead leads to riskier investing.

He specifically recommended keeping a trading journal — recording the day's weather, one's mood over the three days leading up to a trade, and a regret score out of 10 — explaining that this naturally leads to self-objectification and plan formation. He noted that rather than drafting a grand plan from the outset, plans often emerge organically from the habit of consistent journaling, citing examples such as ship's logs, trading journals, and war diaries. Finally, he noted that what is needed in the current situation is not doubt about direction but a matter of pacing — the AI industry outlook itself may remain valid, even if the recent pace of advance was simply too fast.

CEO Lee Kwang-soo criticized SK Hynix's investor relations as excessively passive despite results that were not poor. He noted that on a critical day when the company reported earnings even as its share price had halved from its peak, it failed to soothe shareholder sentiment or convey an active commitment. He pointed out that the phrase 'we will review shareholder return measures from multiple angles' is fundamentally different from saying 'we judge the recent share price decline to be excessive and will review the matter more actively' — and that SK Hynix stopped at the former.

He explained the effect of share buybacks and cancellations using U.S. examples. Since the mid-2000s, U.S.-listed companies have steadily bought back and canceled shares, reducing shares outstanding, which he said became a core factor underpinning confidence in the U.S. stock market. A study of 1,200 U.S. companies found that firms that bought back and canceled shares generated short-term excess returns, with the supportive effect being particularly pronounced during periods of share price decline and heavy selling pressure.

He criticized the company for failing to properly highlight to the market the 40 trillion won in windfall net profit from the sale of its SK Hynix equity stake, and for being passive in communication — citing ADR listing constraints as a reason — despite being a company with a market capitalization exceeding 1,000 trillion won. He also presented the counterargument that U.S. ADR listing rules may restrict disclosure of new information relevant to investment decisions.

He assessed that the market is currently not functioning normally. He described the recent decline from the 9,000 level down to the 7,500-7,000 range as within the bounds of a technical correction, but said the further slide past 7,200, breaking the 120-day moving average around 6,700, and falling to the 5,500 level constitutes an emergency on the scale of a war or an earthquake. He said authorities appear to be treating the situation lightly, as a mere debate over whether chips have peaked or bottomed, when in reality the market is paralyzed by panic selling, and argued that emergency measures are urgently needed — including activating the market stabilization fund, restricting leveraged ETF trading, and imposing a temporary short-selling ban on the KOSDAQ.