Jim Cramer Highlights Micron and SK Hynix Stock Link

Have you ever wondered why a top US tech stock suddenly moves before Wall Street even opens? CNBC host Jim Cramer recently pointed out an interesting pattern involving memory chipmaker Micron Technology (MU).

On an episode of CNBC's Mad Money, Cramer expressed his frustration over how closely Micron's stock tracks South Korean chipmaker SK Hynix. A viewer asked whether volatile Micron suits a long-term investment or an options straddle strategy. Cramer replied that Micron closely follows SK Hynix's price action in Korea.

I’m hoping the linkage ends one day, but it hasn’t yet. - Jim Cramer, Mad Money

Why Does a US Memory Stock Follow Seoul?

Micron is headquartered in the United States. However, its stock price often gets pulled along by overnight trading in South Korea. This setup leaves Micron shareholders exposed to market moves in Seoul before regular US trading begins.

There are several key reasons why these two semiconductor stocks share such a strong connection:

• Market Dominance: Together, SK Hynix and Samsung Electronics account for over half of South Korea's total stock market capitalization, according to Yahoo Finance.
• AI Chip Demand: Both Micron and SK Hynix manufacture High-Bandwidth Memory (HBM). These specialized chips are stacked next to artificial intelligence processors, placing both companies in the same demand cycle.
• Shared Industry Triggers: News affecting the broader memory market impacts both companies equally. For example, Chinese DRAM maker ChangXin Memory Technologies (CXMT) recently announced a denser memory-cell design, hitting both stocks at once.

Looking at the Recent Price Patterns

This mirror-like trading behavior was clearly visible on October 13. South Korean media outlet SBS reported that SK Hynix closed 10.09% lower in Seoul. Shortly after, Micron's US shares fell by about 5%.

However, CNBC noted that broader Wall Street markets had already declined that Monday. This suggests the influence can run in both directions between US and South Korean exchanges.

Investors should note that past performance of financial assets or company performance does not guarantee future results.

SK Hynix Posts Record Quarterly Earnings

The price connection faced a fresh test when SK Hynix released its third-quarter financial results on October 28. Driven by the ongoing memory chip boom, the company delivered historic numbers.

South Korean news outlet JoongAng reported that SK Hynix's third-quarter operating profit hit 83.33 trillion won (around $62.8 billion). That represents a 632% increase year-on-year, topping the analyst consensus estimate of 76.96 trillion won.

Interestingly, SK Hynix's Seoul-listed shares had closed nearly 8% lower the day before the report. Market watchers are watching Micron's price reaction to see if the correlation holds during positive news cycles as well.

Can the Link Between the Stocks Break?

Some analysts see an advantage in Micron's US roots. Back in July, broker F&C Equities favored Micron over Korean competitors due to uncertainty in the South Korean market and potential global tariff risks.

At the same time, new trading avenues might make the two stocks even more connected. SK Hynix launched American Depositary Receipts (ADRs) on the Nasdaq in July. This allows US investors to trade both industry leaders side by side during US market hours, which could deepen the overlap Cramer hopes to see end.