Seagate Stock Falls 6% on SK Hynix HBM Expansion Slowdown

Shares of data storage manufacturer Seagate (NASDAQ:STX) fell 6% 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. HBM is a critical component for AI accelerators, and any slowdown in its production could signal weaker demand for AI infrastructure.

Potential Reasons

The direct cause of the decline is a media report indicating that SK Hynix, one of the largest HBM producers, is scaling back its expansion plans. Although Seagate does not directly produce HBM, the slowdown may imply reduced demand for AI-related hardware, negatively impacting storage companies like Seagate.

Context

Seagate's stock had been volatile over the past month but was trading near its 52-week high before this drop. This development comes amid strong growth in the AI sector, but concerns over capital expenditure slowdowns could affect related companies.

Similar Moves in the Sector

The decline was not limited to Seagate; other stocks in the chip and storage sector, such as Western Digital (WDC) and Micron Technology (MU), also fell by varying degrees.