- Shares in companies linked to AI have plunged further after disappointing results from the South Korean chipmaker SK Hynix, sending the country’s stock market tumbling.
South Korean chip stocks have experienced a significant decline as a result of disappointing earnings from SK Hynix, which reported record profits for the second quarter that fell short of investor expectations.1
This triggered a sell-off that saw SK Hynix's shares plummet by as much as 16%, contributing to a broader market downturn.
The Kospi index, heavily influenced by semiconductor manufacturers, slid by 12.6% on Wednesday, following a near 11% drop the previous day, marking its lowest level since early April.
Overall, the market has seen a staggering decline of over 40% from a peak reached just over a month ago, raising concerns about the sustainability of tech spending.
Analysts have noted that the disappointing earnings from SK Hynix reflect growing investor anxiety regarding the longevity of tech companies' spending sprees.
Han Ji-young, an analyst at Kiwoom Securities, remarked, “Hopes of the market rebounding today after a 10% plunge yesterday faded, triggering panic selling and forcing most stock investors to book losses.”
In response to the market turmoil, South Korea’s finance minister, Koo Yun-cheol, announced that the government is reviewing market stabilization measures to address the ongoing crisis.
“Shares in companies linked to AI have plunged further after disappointing results from SK Hynix, contributing to a broader decline in the South Korean stock market. This downturn reflects growing concerns over the impact of AI performance on the semiconductor sector.”
The Guardian
