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Samsung Electronics and SK Hynix shares fell as investors worried about Chinese rival CXMT and Broadcom CEO comments on AI stock volatility. The Kospi index also declined, reflecting broader semiconductor sector uncertainty.
Samsung Electronics Co. and SK Hynix Inc. shares extended a recent selloff on Tuesday, driven by concerns over Chinese competitors and doubts about the sustainability of the artificial intelligence (AI) stock rally. The decline dragged the Korean equity benchmark Kospi down as much as 4.7% during the session, according to Bloomberg.
Investors reacted to reports that China's CXMT Corp. has made progress on a new memory architecture that Samsung and SK Hynix are also developing. This development raised fears that CXMT could increasingly challenge established memory-chip leaders.
Additionally, comments from Broadcom Inc.'s chief executive regarding the "gambling-like qualities" of AI stock investment contributed to market anxiety. Ha SeokKeun, chief investment officer at Eugene Asset Management, stated, "Uncertainty over whether the upcycle can last into 2028 and beyond appears to be weighing on valuations and share prices" of Korean chipmakers.
The sell-off was not limited to South Korea. US chipmakers slumped overnight, with memory firm Micron Technology Inc. retreating 3.9%. Other US semiconductor stocks also closed lower, including Advanced Micro Devices (AMD), which lost 2.3%, Nvidia, which fell 1.3%, and Broadcom, which declined 1.9%.
In Asia, the negative sentiment extended to other major semiconductor players. Japan’s Tokyo Electron, a chip-equipment maker, fell 6.6%, while Taiwan Semiconductor Manufacturing Co. (TSMC) declined 1.6%. Japan’s Nikkei 225 dropped 2.5%, and Taiwan’s Taiex fell 1.9%.
The sharp declines in Samsung and SK Hynix shares highlight growing investor skepticism about the long-term durability of the AI-driven semiconductor boom. While CXMT's specific market-share gains have not been quantified, the mere progress in its memory architecture has been enough to trigger significant volatility in the sector. The simultaneous drop in US and Asian chip stocks suggests that concerns about competition and valuation are global, affecting the entire semiconductor supply chain.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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