Best performing chipmaker stock gets second warning from South Korean exchange

South Korea's stock exchange has issued another warning over the rapid rise in shares of SK Hynix Inc., which have surged as much as 230% on a year-to-date basis on the artificial intelligence boom.

The Korea Exchange has issued an "investment caution" on the stock for one day. This is a similar warning to the one issued in November. Such a warning does not halt trading but is a message that investors should proceed with caution.

SK Hynix is a key supplier of high-bandwidth memory to Nvidia, the world's most valuable company. Chip and AI-related stocks have remained volatile in recent times on concerns of a bubble building up within that space.

Exchanges generally issue such warnings due to sudden and unexplained large changes in share price or volumes.

The stock had gained 6% on Monday as well on reports that the company is planning to issue American Depository Receipts (ADRs), to which it said that "nothing is confirmed" yet.

The exchange caution is a pre-warning before a higher-level alert is triggered, which would limit margin trading. If a stock under investment caution meets one of the eight criteria, such as rising 100% in three sessions, the bourse will issue an investment alert. Following that, if the stock rises 40% for two sessions, trading can be halted for one day.

(With Inputs From Agencies)