August 2026 · Macro · Memory
US and Korean equities
On August 3 the Dow closed at an all-time high of 53,178.41, with the S&P 500 at 7,600.50 and the Nasdaq Composite at 25,913.9. Three days later, on August 6, SK Hynix fell 10.37% in Seoul, the KOSPI dropped 4.58%, 124 stocks printed new lows, and a sell-side circuit breaker triggered at 10:18 in the morning. The trigger was SanDisk guiding below expectations on NAND, followed by target cuts from Citigroup and Wells Fargo.
Two markets levered to the same industry, moving opposite directions in the same week: that is the defining feature of the last four months.
Volatility
The dispersion was not limited to the gap between the two markets. It showed up inside each of them, week to week and often day to day.
By late June the Korea Exchange had already activated close to 30 sidecars in 2026, against a prior annual record of 26 set in 2008. The seventh circuit breaker of the year came on July 13 and an eighth followed later in the month. On June 5 the Nasdaq fell 4.2% and the iShares Semiconductor ETF fell 10%, its worst session in over six years, and the following Monday the KOSPI dropped as much as 8% intraday. On July 28 the KOSPI closed down 10.84% at 6,023.66, with the Nikkei falling 3.95% the same day, Kioxia down 17%, Advantest down 10.25%, and Tokyo Electron down 10%.
The upside was equally violent. Over the second quarter Micron rose 241%, SanDisk 258%, Intel 216%, and Marvell 200%. Within the first week of August, SK Hynix rose 6.72% on Wednesday and fell 10.37% on Thursday, on news originating from a company that does not compete with it in high-bandwidth memory.
Across July the KOSPI lost roughly 23%, its worst month on record, erasing near ₩250 trillion. Goldman Sachs has nonetheless maintained a twelve-month index target of 12,000 against a level near 6,000, which says less about Goldman than about how far apart reasonable views on this market currently sit.
A market this fast is not necessarily a market that is wrong. It is a market in which a small position is priced by the same volatility as a large one, without the same capacity to wait it out.
Memory: record earnings, falling shares
In May, Samsung Electronics and SK Hynix each crossed a trillion dollars in market value. By the end of July both had given back a substantial part of that, and the earnings that arrived on July 29 did not explain the move.
SK Hynix reported operating profit of ₩60.54 trillion on revenue of ₩79.32 trillion, a 76% operating margin, higher than TSMC’s. Both figures were company records and both missed consensus, which sat near ₩64.1 trillion and ₩84.1 trillion. The stock fell 8.98%. Samsung’s semiconductor division posted a record ₩89.2 trillion in operating profit, while its Galaxy mobile division posted the first operating loss in its history at ₩0.7 trillion.
Memory cost inflation destroying downstream margins had been a forecast for over a year; in the second quarter it became a reported line item, and it happened inside the one company that manufactures its own DRAM. HP has disclosed that memory moved from 15 to 18% of a PC bill of materials to roughly 35%. Gartner expects PC shipments to fall 10.4% this year, the steepest contraction in over a decade, and IDC has smartphone units down 13%. TrendForce now projects third-quarter conventional DRAM contract prices rising 13 to 18% quarter over quarter against 58 to 63% in the second quarter, and attributes the deceleration to buyers being unable to absorb further increases rather than to supply improving.
Oil, Hormuz, and the Fed
Brent crude ran a full round trip. Prices cleared $100 in March on the Hormuz blockade, returned to roughly pre-war levels by late June, then rose back above $76 on July 8 after renewed US strikes. In early August, reported progress toward an Iran-Oman transit arrangement drove crude sharply lower and lifted global equities, which is the immediate reason the KOSPI rose 3.76% on August 5 before falling 4.58% the next day.
Meanwhile the Federal Reserve held at 3.5 to 3.75% on July 29, its fifth consecutive hold, with Hammack, Kashkari, and Logan dissenting in favor of a hike. That is the most one-directional dissent since September 2016, and the June projections already implied one increase before year end. The 30-year yield reached its highest level since 2007 on the announcement. Under Warsh the statement no longer carries forward guidance, so repricing happens faster and with less warning than the market is accustomed to.
An equity market carrying roughly 45% of its capitalization in AI-linked names, priced against a policy rate whose next move is more likely up than down, has a narrow margin for error.
New supply
Two listings framed the quarter. SK Hynix listed on the Nasdaq on July 10 at $149, opened at $170, and raised roughly $26.5 billion in the largest first-time US share sale by a foreign company. ChangXin Memory listed on Shanghai’s STAR Market on July 27, raising ¥57.92 billion in Asia’s largest IPO of the year, with proceeds earmarked for domestic high-bandwidth memory production by the end of 2026.
One listing gave US investors direct access to Korean memory. Another funded the competitor most likely to end the shortage that makes Korean memory valuable.
No capital deployed
Sonsu’s infrastructure was built in May and funded in June. No capital was deployed across the period covered here. I judged the markets too volatile to deploy capital with conviction, and the decision log ran through the quarter without positions attached to it.
The open question is whether the 2027 HBM4 contract round in the second half of this year settles the argument that July started.