DRAM Dips Premarket: Samsung, SK Hynix Announce $590B Expansion Push As South Korea Plans To Double DRAM Capacity

• Samsung and SK Hynix shares recouped losses from earlier in the day in Seoul as the official announcement was made.
• DRAM declined 1.4% in the U.S. premarket session
• Stocktwits sentiment for DRAM remained ‘extremely bullish.’

Samsung Electronics, SK Hynix, and the South Korean government on Monday announced plans to invest about $590 billion to build a new chip complex, including four chipmaking plants, with the aim of doubling the country’s dynamic random access memory (DRAM) production capacity in five years.

Shares of the two companies recouped losses from earlier in the day in Seoul as the official announcement was made. The Kospi closed down just 0.2%, recovering from a 3.4% drop earlier. The Roundhill Memory ETF (DRAM) extended its losses, down 1.4% in premarket trading on Monday.

Samsung and SK Hynix plan to build two chipmaking plants apiece for 800 trillion won ($518 billion), the country’s industry minister said Monday. The investment pledges are part of the president’s “Three Mega Projects for the Great Leap Forward” initiative aimed at building up the country’s capabilities in semiconductors, AI data centers, and robotics.

While investors are digesting the capex expansion’s impact on chipmaker profits, most took the government initiative and its determination for AI infrastructure buildout as positive for the broader industry.

Samsung, SK Hynix Attract US Investor Attention

Samsung and SK Hynix have become key beneficiaries of the AI boom, as surging demand for high-bandwidth memory (HBM) chips continues to outstrip supply amid aggressive AI infrastructure spending by cloud companies and technology firms.

SK Hynix, which is preparing to list its shares on Nasdaq next month, is the dominant supplier of advanced HBM chips to Nvidia. Samsung, SK Hynix, and U.S. memory giant Micron are the top three holdings of DRAM.

While the business is booming, the incredible size and influence of Samsung and SK Hynix in the South Korean market have emerged as a cause of concern. 

Last week, regulators stepped in twice to pause trading on the Kospi and steady nerves after stocks dropped sharply. 

In the U.S., investors sold chip stocks and booked profits on Friday, after fresh record-hitting rallies in major names following incredible results from Micron. U.S. memory stocks were up again in the premarket session ahead of Monday.

Retail View On DRAM

On Stocktwits, the retail sentiment for DRAM rose over the weekend to ‘extremely bullish’ as of early Monday, while message volume for the ETF more than doubled in the past week.

A trader wrote: “SK Hynix & Samsung are still dropping. Samsung Electronics and SK Hynix each unveiled major chip investment plans Monday at a presidential briefing in Seoul. Neither announcement stopped their stocks from falling sharply.”

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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