SK Hynix's $24-B Rally Sputters Over Chips

SK Hynix Inc.'s $24 billion rally this year is unraveling fast as the South Korean chipmaker finds itself embroiled in an intensifying US-China tech war, as reported by Youkyong Lee for Bloomberg News.

A key supplier to both Apple Inc. and Nvidia Corp., SK Hynix has ridden this year’s artificial intelligence boom to surge more than 60% through the end of August. I Photo: SK Hynix Newsroom

A key supplier to both Apple Inc. and Nvidia Corp., SK Hynix has ridden this year's artificial intelligence boom to surge more than 60% through the end of August. Bulls brushed aside the chipmaker's dismal quarterly loss and warnings related to US restrictions on China, making the stock the most expensive among Asian chip giants.

Now, a shocking revelation that its products were found inside Huawei Technologies Co.'s Mate 60 Pro is prompting a reality check.

While SK Hynix said it has suspended doing business with the Chinese phone maker since US curbs, traders were nonetheless on edge, prompting a 6% slide since the news hit on Thursday.

The incident serves as a reminder of the geopolitical risks facing Korean firms that have heavy business operations in China. The losses may just be the start of a steeper downturn for the stock.

China's plan to broaden its ban on the use of iPhones to state firms and government agencies bodes ill for suppliers in the region, including SK Hynix. Sales data for new iPhones, typically released every fall, is a key barometer of global demand for electronic devices that run on chips.

WEEKLY FEATURE : Jose Mari Chan And The Christmas Anthem