On Tuesday, South Korean semiconductor shares experienced a sharp decline, continuing a trend that began with a weak session on Wall Street. SK Hynix saw its stock drop by more than 10%, while Samsung Electronics fell over 8%. Other companies associated with AI technology also faced heavy selling, with Samsung SDI down over 7%, LG Innotek down nearly 14%, and Seoul Semiconductor down about 6%.
The downturn was not limited to South Korea; Japan's semiconductor sector also suffered, with Tokyo Electron falling more than 9% and Kioxia plummeting over 15%. This selloff followed a weak performance in U.S. semiconductor stocks, where the VanEck Semiconductor ETF (SMH) lost more than 2%. Major U.S. companies like AMD and Teradyne also saw declines of 5% and 4%, respectively.
The interconnectedness of Asian technology shares and the U.S. AI market is becoming increasingly evident, as Samsung Electronics and SK Hynix are key suppliers of high-bandwidth memory chips essential for AI servers. Consequently, their stock prices are particularly vulnerable to fluctuations in spending expectations from U.S. hyperscalers