A global slide in semiconductor stocks deepened, sending South Korea’s chip-heavy equity benchmark down 7% as concerns about AI overheating and Chinese competition intensified.
Samsung Electronics Co. and SK Hynix Inc. shares dropped more than 8% each Tuesday, weighing on the Kospi. A gauge of Chinese technology stocks tumbled 3.6% before paring its drop, while Japanese flash memory firm Kioxia Holdings Corp. shed more than 12%. US chipmakers slumped overnight.
Investor angst over the AI trade intensified after Broadcom Inc.’s chief executive likened market sentiment to a casino and warned that financing the buildout will become a key problem. That further undermined the case for AI stocks, just as higher interest rates begin to take a toll on massive debt-funded deals and threaten once-hot initial public offerings.
“Uncertainty over whether the upcycle can last into 2028 and beyond appears to be weighing on valuations and share prices” of Korean chipmakers, said Ha SeokKeun, chief investment officer at Eugene Asset Management.
Korean stocks took the biggest hit, as investors also reacted to a report that Chinese rival CXMT Corp. has made progress on a new memory architecture that Samsung and SK Hynix are also working on. The Seoul stock exchange briefly halted Kospi program trading for the first time since August.