Why SK Hynix Plunged Today

Shares of memory maker SK Hynix (NASDAQ:SKHY) plunged 13.4% on Thursday, amid a bloodbath for the broader semiconductor sector. It appears investors were caught off guard by the magnitude of the Democratic "wave" in Tuesday's midterm election, and now might be contemplating limits or bans on data center build-outs. Some post-election statements by Democratic lawmakers have also fed into those fears today.

Additionally, it appears that SK Hynix is having problems with the U.S. Commerce Department. The agency has continued to hold up export licenses for chipmaking equipment shipments to SK Hynix's NAND flash plants inside China.

In a note today, sell-side analyst Matt Bryson of Wedbush Securities wrote that the U.S. Commerce Department is holding up the export license for chipmaking equipment to be sent to SK Hynix's NAND flash facilities in China. Even though SK Hynix is a South Korean company, it appears the Commerce Department doesn't want leading-edge equipment being sent into the country. The controversy may also be holding up SK Hynix's plan to invest in a major manufacturing hub in New York.

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