Topline
South Korean stocks faced a second straight day of losses Wednesday, led by SK Hynix, as the memory chipmaker’s record AI-fueled earnings fell short of the market’s high expectations and were further dampened by concerns about chipmaking advancements in China.
SK Hynix shares slumped nearly 10% after an earnings miss.
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Key Facts
South Korea’s benchmark KOSPI index fell nearly 13% on Wednesday—triggering a halt in trading—before closing 6% down.
The KOSPI index has fallen by more than 15% in the past two days amid concerns about the AI-fueled rally, which has boosted Korea’s top chipmaking stocks.
SK Hynix reported a near sixfold increase in operating profit to a record KRW 60.5 trillion ($42 billion) in the three months ending in June, but this fell short of market forecasts of around KRW 64 trillion ($44 billion).
This triggered a second straight day of selloff in SK Hynix shares, which tumbled nearly 19% before ending the day at KRW 1.4 million ($964)—down more than 9.6% from Tuesday’s close.
SK Hynix’s memory chipmaking rival Samsung Electronics’ shares also took a tumble on Thursday—falling 5.2%.
The sell-off hit other major chipmakers in Asia, including Japanese memory chipmaker Kioxia—whose stock fell 13.85% on Wednesday—and Taiwanese semiconductor giant MediaTek, which fell nearly 5%
News Peg
Aside from SK Hynix’s earnings miss, the selloff comes amid concerns about advancements reported by Chinese chipmaking and AI companies. Memory chipmaker CXMT, which made its market debut earlier this week, saw its stock price soar an additional 12.6% on Wednesday, following a 466% gain on Monday after going public. Along with American semiconductor giant Micron, Samsung and SK Hynix control nearly 90% of the global RAM chip market, which is in high demand due to the ongoing build-out of AI infrastructure. CXMT, reportedly being courted by Apple as an alternative RAM supplier, is seen as a major emerging threat to the trio. China has also reportedly made major strides in advanced chip-making machines, which could threaten Dutch semiconductor giant ASML and Taiwanese chipmaker TSMC. ASML’s shares have fallen more than 11% in the past week, while TSMC’s stock has dropped more than 6.5%.
What To Watch For
Despite the selloff in Asia, U.S. stock futures remained largely flat. Memory chipmaker Micron’s stock remained slightly below the closing price of $820 after plunging more than 8.8% on Tuesday. Chipmakers AMD, Intel and Qualcomm inched up slightly in early trading on Wednesday after declines of 8.1%, 5.8% and 4.2%, respectively, on Tuesday. Shares of AI chipmaking giant Nvidia—which ceded the title of the world’s most valuable company to Apple earlier this week—were also flat on Wednesday.
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