SK Hynix plunges 10% as investors question AI spending

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SK Hynix plunges 10%

Highlights

SK Hynix shares fell 10.37%.
Samsung and other chipmakers also fell.
AI spending concerns drove the selloff.

On Thursday, SK Hynix shares fell 10.37% to around 1,495,000 won, while Samsung Electronics shares dropped more than 6%. South Korea's benchmark Kospi index slid about 4.5% as investors reduced their exposure to semiconductor and artificial intelligence-related stocks, CNBC reports.

Wall Street losses spread across Asia

The selloff followed a weaker session for major U.S. technology companies, where investors remained uneasy about the scale and profitability of artificial intelligence spending. Those concerns quickly reached Asian suppliers whose valuations depend heavily on expectations for data-center investment and advanced chips.

Japanese technology shares also retreated. SoftBank Group lost more than 4%, Tokyo Electron fell over 5%, Advantest declined about 2%, and memory-chip producer Kioxia dropped nearly 9%. Taiwan Semiconductor Manufacturing Co. also moved lower.

The reversal came only a day after several Asian technology stocks posted strong gains. Such rapid swings show how tightly regional chipmakers are linked to changes in sentiment toward AI spending in the United States.

AI outlook remains stronger than share prices

Despite the sharp market reaction, the industry's operating outlook has not weakened to the same degree. J.P. Morgan said the latest Asian technology selloff had not disrupted the AI investment cycle and found no fundamental signal pointing to meaningful weakness over the next six to 12 months.

Large technology groups are still committing substantial capital to data centers, processors, and memory. That spending directly supports demand for high-bandwidth memory, an area in which SK Hynix holds a leading position.

S&P Global also reported that global technology-equipment output expanded in July at its fastest pace since May 2021. Demand for software and related technology services strengthened as well, suggesting the broader sector continues to benefit from AI and defense investment.

Volatility becomes the immediate risk

The latest decline reflects doubts about valuations and spending returns rather than a clear collapse in semiconductor demand. Investors are questioning how quickly hyperscale computing projects can generate profits after companies committed large sums to AI infrastructure.

That distinction matters for SK Hynix. Its earnings prospects remain closely tied to demand for advanced memory, but its shares are also vulnerable to shifts in global risk appetite. At 1,495,000 won, the stock remains a major proxy for the AI investment cycle, leaving it exposed to further sharp swings even when industry fundamentals remain supportive.

We also reported Samsung and SK Hynix plan massive AI chip investments in South Korea.

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