Samsung, SK Hynix slide amid Nvidia financing worries, China competition - Yahoo Finance

What the report says

Reuters, via Yahoo Finance, reported that Asian semiconductor shares fell sharply on Tuesday, with South Korean chipmakers at the center of the selloff. Samsung Electronics ended down 13.4%, its steepest one-day drop in nearly 20 years, while SK Hynix lost 14.7%. The pressure helped pull South Korea’s KOSPI index down 10.8%, as the two companies make up almost half of the benchmark. Losses also spread to Japan’s Kioxia Holdings and Taiwan’s MediaTek.

The report said investors were reassessing high valuations tied to the artificial intelligence boom, particularly after concerns emerged about how major AI infrastructure projects are being financed. Reuters cited a Wall Street Journal report that Nvidia might provide about a $250 billion backstop for an OpenAI data-center project, raising questions over whether the chipmaker is helping finance demand from its own customers. Nvidia shares fell nearly 5% on that concern.

Competition from China also weighed on sentiment. Analysts cited by Reuters pointed to reports of domestic Chinese progress in deep ultraviolet lithography equipment and the strong market debut of Chinese memory-chip maker CXMT. Those developments fed worries that Chinese suppliers could expand capacity and eventually pressure pricing in global memory markets.

The story matters because Samsung and SK Hynix are major suppliers in the global memory-chip industry, and SK Hynix is a key provider of high-bandwidth memory used in AI systems. Reuters noted that some investors still see the China threat as longer term, especially in advanced HBM, but the selloff showed how quickly enthusiasm around AI-linked chip stocks can reverse.