SK hynix's American Depositary Receipts (ADRs) tumbled 5.04% in pre-market trading on Tuesday, extending a sharp global selloff in semiconductor stocks as a confluence of negative catalysts rattled investor confidence in the memory chip sector.

The decline was driven by intensifying competition fears after Chinese DRAM maker ChangXin Memory Technologies (CXMT) surged 466% on its Shanghai trading debut, raising concerns about future oversupply and pricing pressure in the global memory market. Adding to the anxiety, reports emerged that China has begun mass production of domestic deep ultraviolet (DUV) lithography machines, potentially accelerating the technological advancement of Chinese chipmakers. Meanwhile, growing skepticism over the sustainability of massive AI infrastructure investments weighed on sentiment, with Nvidia's credit default swaps spiking to a record high after the company disclosed AI-related financing deals exceeding $750 billion. Brokerage reports forecasting that memory chip prices could peak in 2027 further fueled profit-taking across the sector.

The pre-market plunge in SK hynix ADRs mirrored the heavy losses in Asian markets, where South Korea's KOSPI index fell over 10% and SK hynix's Korean-listed shares dropped more than 14%. As a key supplier of high-bandwidth memory chips to Nvidia, SK hynix remains highly sensitive to shifts in AI investment sentiment and competitive dynamics in the DRAM industry.