SK Hynix Drops 14.65%, Global Chip Sell-Off Deepens
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- SK Hynix plunged 14.65% at Tuesday's close in South Korea and Samsung Electronics fell more than 13%, triggering a global semiconductor sell-off that hit AI-linked names hardest
- Nvidia fell roughly 1.2% in US premarket trading, while Intel and AMD dropped more than 3% and Micron fell nearly 5%, following Monday's decline in the VanEck Semiconductor ETF (SMH), which lost more than 2%
- Japanese and Taiwanese chip names also sold off sharply: Tokyo Electron fell 10.96%, Advantest slid over 10%, Kioxia plunged more than 18%, SoftBank dropped 4.43%, and TSMC closed nearly 3% lower, with China's ChiNext 300 down 6.49%
- ASML fell more than 8% on Monday after The Information reported a Chinese company is manufacturing an immersion deep ultraviolet lithography machine, an area ASML dominates; ASM International and BE Semiconductor were also lower in early European trade
- Owen Lamont of Acadian Asset Management said SK Hynix's sharp swings reflect "incredible uncertainty" about how the AI investment cycle will affect the economy, and that leveraged ETFs in Korea, Hong Kong, and the US may be magnifying market volatility
- Sundeep Gantori of Standard Chartered attributed the sell-off to deteriorating sentiment toward semiconductors following media reports of China's ambitions in memory chips and lithography equipment, plus broker reports pointing to a memory price peak in 2027, though he argued risk-reward has improved at current valuations
Why it matters: SK Hynix and Samsung now supply most high-bandwidth memory for AI servers, so a single Asian sell-off transmits directly into US chip valuations — Nvidia, AMD, and Micron all dropped premarket, and ASML shed 8% on reports of Chinese competition in lithography. Standard Chartered's Gantori argues risk-reward has improved at current levels despite broker reports flagging a 2027 memory price peak.
