Daily Brief

The sharpest move in Tuesday's session (August 18) came in memory chips: the Philadelphia Semiconductor Index fell 4.98%, with Micron down 7.3%, SanDisk down 9.1%, Western Digital down 5.3% and SK Hynix's U.S. ADR down 9.2%. The trigger was a Wall Street Journal report that nine large technology companies now carry roughly $3 trillion in off-balance-sheet AI commitments — obligations growing faster than their combined capital spending of about $600 billion a year, and roughly triple their outstanding leases and long-term borrowings. The mechanism worked from both ends: the 30-year Treasury yield touched 5.34% intraday, a 19-year high, and the 10-year sat near 4.71%, so the future cash flows of capital-intensive chipmakers got discounted at a steeper rate. With SanDisk up 653%, Micron up 255% and Western Digital up 211% year to date, the selling looks more like profit-taking on an extended position than deteriorating fundamentals.

What is new today is the industry's answer. SK Hynix announced a 40 trillion won (about $29 billion) buyback, repurchasing and cancelling roughly 24.07 million shares — about 3.3% of its outstanding stock — between August 20 and November 19. It is the largest cancellation of treasury shares by a listed South Korean company. The company also raised its 2025-2027 shareholder return target to "more than 50% of cumulative free cash flow," and noted net cash of roughly 69 trillion won at the end of the second quarter. Because the shares are cancelled outright, earnings per share rise without any additional capital outlay; management said the decision reflects its view that "the company's intrinsic value is not fully reflected in the current share price." The Seoul listing closed down 9.75% on Wednesday before the announcement landed, and the U.S. ADR was up 5.6% in premarket trade.