- Samsung and SK Hynix fall by more than 10% amid renewed fears over AI spending and Chinese competition.
- The sell-off in AI stocks has intensified, driving South Korea’s stock market down to its lowest level in three months.
- Investors continued to ditch chip stocks on Tuesday, amid rising concerns about the huge amount of borrowing among AI companies to fund their datacentre expansion plans.
- SK Hynix and Samsung Electronics fell by more than 10%, dragging the country’s Kospi share index down to its lowest point since mid-April.
- Analysts attributed the sell-off to renewed worries over AI investment spending, and competition from cheaper Chinese companies.
- China has begun mass production of homegrown deep ultraviolet (DUV) chip-making tools.
- Shares in the Chinese memory chip maker CXMT rose by 466% when it floated on the Shanghai stock exchange.
South Korean chip stocks have taken a significant hit, with Samsung and SK Hynix both falling over 10%. This decline is attributed to renewed fears regarding AI investment spending and competition from Chinese companies. The Kospi index has dropped to its lowest level in three months, reflecting a broader sell-off in the market.1245
Investors are increasingly concerned about the huge amount of borrowing among AI companies to fund their datacentre expansion plans. This has led to a significant sell-off in AI stocks, which has further impacted the semiconductor sector. Analysts have pointed out that the competition from cheaper Chinese firms is also a major factor in this downturn.3
China has begun mass production of homegrown deep ultraviolet (DUV) chip-making tools, which poses a direct threat to South Korean manufacturers. Additionally, shares in the Chinese memory chip maker CXMT surged by 466% upon its debut on the Shanghai stock exchange, highlighting the competitive landscape.67
The market's reaction to recent news surrounding Nvidia has also been notable, with the company experiencing a 5% drop, closing below the $200-per-share mark. This has raised further concerns about the timing of investments in the sector, as indicated by the spike in Nvidia's five-year CDS.
“The sell-off in AI stocks has driven South Korea’s stock market down to its lowest level in three months, with investors concerned about the rising debt among AI companies for datacentre expansions. Additionally, China has begun mass production of homegrown deep ultraviolet chip-making tools, intensifying competition.”
The Guardian
