What Happened?
A number of stocks fell in the afternoon session after a report that South Korea's SK Hynix is slowing its high-bandwidth memory (HBM) expansion rattled the AI-chip complex.
The selling started in Asia as SK Hynix and Samsung each dropped more than 12%, dragging the KOSPI down about 10% and triggering a 20-minute market-wide circuit breaker, then carried into Europe (ASML −5%, Infineon, ASM International and STMicroelectronics down 5–8%) and the U.S., where the Philadelphia Semiconductor Index opened down roughly 7% a day after closing at a record high.
The headline sounds bearish for AI, but the underlying report is a margin story, not a demand story. SK Hynix is deliberately slowing its HBM4 ramp to redirect capacity into conventional DRAM, where shortages have pushed operating margins above HBM's. Korean analysts pegged the margin gap at more than 15 points. HBM is the memory bolted onto Nvidia's AI accelerators, so any "slowing HBM" signal instinctively sparks fears the AI build-out is cooling which is why the reflex was to sell.
The more accurate read is that all three memory makers are running the market tight (Samsung flagged a 146% DRAM ASP jump in Q1, SK Hynix mid-60%), keeping pricing power with sellers. The bigger driver appeared like profit-taking after a parabolic run. Micron rose ~300% since the start of the year, colliding with a hawkish rate shift: traders pricing 50bps of Fed hikes by December under new Chair Kevin Warsh, making debt-funded AI capex harder to justify at record valuations. The divergence confirmed it: memory names took the brunt (Micron −11%) while logic-heavy Nvidia fell only ~3.6%. Wedbush framed the drop as a buying opportunity with enterprise demand intact.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Semiconductor Manufacturing company Applied Materials (NASDAQ: AMAT) fell 8.3%. Is now the time to buy Applied Materials? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Teradyne (NASDAQ: TER) fell 8.3%. Is now the time to buy Teradyne? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Entegris (NASDAQ: ENTG) fell 9.4%. Is now the time to buy Entegris? Access our full analysis report here, it’s free.
Zooming In On Entegris (ENTG)
Entegris’s shares are extremely volatile and have had 38 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 9.1% on the news that President Trump announced Apple had agreed to design and manufacture chips with Intel in the United States, a foundry validation the market had been waiting on for over a year.
President Donald Trump announced the deal, which served as a direct catalyst for Intel and lifted sentiment across the industry. Micron also added 7-8% after a coordinated wave of analyst price target hikes. Stifel, Wedbush, Deutsche Bank, and TD Cowen revised their models sharply higher reinforced by Apple CEO Tim Cook's acknowledgement that memory price increases have become unavoidable.
The macro backdrop also helped. The US and Iran released the text of a signed interim agreement extending the April ceasefire by 60 days, a development that Art Hogan of B Riley Wealth described as "usurping any negative sentiment brought about by a more hawkish Fed yesterday." Lower oil prices eased the inflation pressure that sent the market lower earlier in the week; for a sector carrying high multiples that compress when the risk-free rate rises, any relief on the rate-hike narrative matters.
Entegris is up 86% since the beginning of the year, and at $166.58 per share, it has set a new 52-week high. Investors who bought $1,000 worth of Entegris’s shares 5 years ago would now be looking at an investment worth $1,405.
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