Seoul’s Memory Makers Report Into an October Rout

SEOUL, Oct. 26 — SouthSouth Korea’s two memory makers report their third quarters this week into a falling market. Seoul’s Kospi closed down 1.46 percent on Monday, at 5,469.47, leaving it 20 percent lower in October and 40 percent below its record close of 9,114.55, on June 22.

SK hynix, which reports on Wednesday, closed at 1,275,000 won, 24.5 percent below the 1,688,426 won a share it paid, on average, in a 40 trillion won buyback, about $30 billion, that ended on Oct. 21. Its shares slipped 0.16 percent on the day, and Samsung Electronics, which reports on Thursday, fell 1.16 percent, to 213,000 won.In New YorkSK hynix’s American depositary shares, each representing one-tenth of a common share, listed on the Nasdaq in July with an initial public offering price of $149.00. They closed Friday at $137.02, 8.0 percent below that price.

The two memory makers’ profits are at records: Samsung has guided to about 107.4 trillion won of operating profit for the quarter, nearly nine times its figure a year earlier, and SK hynix reported preliminary operating profit of 60.54 trillion won for the second quarter. The shares have gone the other way. Foreign investors sold a net 695.5 billion won of shares on Monday, while institutions and individuals bought, Yonhap reported. SK hynix has lost 56.3 percent since its record close of 2,919,000 won on June 22, and Samsung 41.2 percent since its own, of 362,500 won on June 18.

Goldman Sachs cut its 12-month target for the Kospi to 9,000 from 12,000 in a report on Sunday; by its reading, valuations in South Korea’s memory-chip sector imply a roughly 65 percent decline in 2027 earnings, CNBC reported. Goldman, which kept its overweight stance on Korean shares, made the cut “citing heightened market volatility and slowing earnings momentum,” as CNBC put it, and blamed the wider sell-off in Asian technology shares on concerns over the sustainability of AI spending, rising oil prices and increasingly hawkish central banks. Goldman put the Kospi’s price-to-earnings ratio at around four times, roughly three standard deviations below its historical average.The TargetEven cut, Goldman’s target implies more than 60 percent upside from current levels, CNBC reported. Goldman also estimates that stocks outside memory chips, roughly half the index, are more than 30 percent undervalued.

In Tokyo the chip-equipment makers fell harder. Tokyo Electron lost 3.68 percent, to 9,110 yen, and Advantest, which makes chip-testing equipment, 3.93 percent, to 31,070 yen, as the Nikkei 225 fell 0.80 percent.

The Buyback

SK hynix stopped buying its own shares on Oct. 21, the day before they fell 5.49 percent in Thursday’s sell-off. Over 41 sessions from Aug. 20 it bought 23,693,272 shares, about 3.2 percent of its stock, for 40.004 trillion won, it reported on Monday; on the last day it paid an average of 1,302,482 won a share. At Monday’s close those shares were worth about 30.2 trillion won. It plans to cancel them on Nov. 5, a date it says may change after consultations with the authorities.

When it announced the purchases on Aug. 19, its shares had closed the day before at 1,662,000 won. “The Company considers its recent share price to be undervalued relative to the Company’s intrinsic value and has therefore decided to acquire and cancel treasury shares in the amount of approximately Won 40 trillion in order to achieve efficient capital reallocation and enhance shareholder value,” it wrote in a filing. It said then that it was also “reviewing an expansion of dividends, including existing fixed dividends and special dividends.”The OwnerSK Square, SK hynix’s largest shareholder, holds 146,100,000 of its shares, about 20 percent of those issued, a number unchanged through the buyback, by the company’s count.

The Company considers its recent share price to be undervalued relative to the Company’s intrinsic value and has therefore decided to acquire and cancel treasury shares in the amount of approximately Won 40 trillion in order to achieve efficient capital reallocation and enhance shareholder value.

On Monday Dong-A Ilbo, a Seoul daily, reported that SK hynix was considering a special dividend of about 16 trillion won, or $12 billion, funded by gains from selling its stake in Kioxia, the Japanese memory maker, and could unveil it with Wednesday’s results, according to Reuters’ account of the report. The newspaper cited unnamed investment-banking sources, Stocktwits reported. SK hynix said in a filing on Monday that it was reviewing ways to return money to shareholders but that “no matters have been determined,” and that it would announce further returns, subject to its board’s approval, with its results on Wednesday.

Kim Rok-ho, an analyst at Hana Securities, expects the company to have at least 30 trillion won more to return to shareholders, based on its free cash flow, but not mainly as dividends. “We believe share buybacks and cancellations will play a greater role than dividends,” the analyst said, as quoted by The Korea Times.

SK hynix has also called off a listing. On Friday it said Solidigm, its American flash-storage subsidiary, had ended its review of raising money before an initial public offering, and of the offering itself, “after comprehensively considering capital market conditions and other factors.” Shareholders had objected that a separate listing would deepen the “parent-company discount” on SK hynix’s shares, and the chairman of South Korea’s Financial Services Commission had told lawmakers on Thursday that it would be “subject to the guidelines on split listings,” the Korea JoongAng Daily reported.SolidigmSolidigm was established after SK hynix acquired Intel’s NAND flash-memory and solid-state-drive business in 2021. It accounts for about 13 percent of SK hynix’s corporate value, the Korea JoongAng Daily reported.

SK hynix’s operating profit has risen in each of the past four reported quarters, from 11.38 trillion won in the third quarter of 2025 to 60.54 trillion won in the second quarter of this year, an operating margin of 76 percent. For the third quarter, the consensus of brokers’ estimates compiled by FnGuide is 76.96 trillion won, The Korea Times reported, which would be another record. Samsung, which also makes smartphones, guided on Oct. 8 to about 107.40 trillion won of operating profit on sales of about 195 trillion won, up from 89.49 trillion won in the second quarter and 12.17 trillion won a year earlier.

Samsung’s board approved a plan in August to return 90 trillion to 110 trillion won to shareholders for this year, and the company is expected to give details of about 30 trillion won of dividends around its call, The Korea Times reported.

The Week

The first readings come from U.S.-listed suppliers after the New York close on Monday. Celestica, which makes data-center hardware, reports against its July forecast of third-quarter revenue of $5.25 billion to $5.55 billion and adjusted earnings of $2.88 to $3.08 a share; its call and investor day follow at 8 a.m. Eastern on Tuesday. Cadence, which sells chip-design software, and Rambus, which sells chips and silicon designs for data centers, hold calls at 5 p.m. Eastern. On Tuesday after the close come Seagate, the data-storage company, NXP Semiconductors and Teradyne, which makes chip-testing equipment.

SK hynix holds its results call at 9 a.m. Wednesday in Seoul, 8 p.m. Tuesday in New York, and Samsung at 10 a.m. Thursday in Seoul, 9 p.m. Wednesday in New York. Advantest reports at 3:30 p.m. Wednesday in Tokyo, and Tokyo Electron on Friday. Between the two Korean reports, the Federal Reserve, under Kevin Warsh, ends a two-day meeting with a statement at 2 p.m. Eastern on Wednesday; it is “widely expected to leave interest rates unchanged,” Yonhap wrote.