SK Hynix drops as AI chip sell-off hits Asian tech shares

Asian chip stocks fell sharply Thursday after weakness in U.S. semiconductor names carried into Seoul and Tokyo, according to CNBC. For retail investors, the move is a reminder that the AI trade has become tightly linked across markets: when big chip names in one region sell off, related stocks elsewhere can quickly feel the pressure.

SK Hynix was the standout decliner in South Korea, with its Seoul-listed shares down more than 9%, CNBC reported. That move erased the prior session’s 8% gain and added to a volatile stretch for the memory-chip maker since its U.S. listing last week.

A semiconductor is a chip used to process or store data, and the group has been central to the market’s artificial intelligence rally. AI systems require large amounts of computing power and memory, which has boosted investor interest in companies tied to chips, chipmaking equipment and data-center hardware.

The selling was broad in South Korea. CNBC reported that Samsung Electronics fell more than 7%, Seoul Semiconductor declined more than 5%, LG Innotek lost about 1%, and Samsung SDI dropped more than 2%.

Japanese technology shares also came under pressure. Advantest, an AI-linked equipment maker, fell more than 6%, while SoftBank Group slid nearly 7%, CNBC reported. Tokyo Electron lost more than 5%, and Renesas Electronics declined 4%.

The Asian declines followed a rough U.S. session for chip stocks. CNBC reported that Micron Technology sank 8%, Intel fell more than 4%, and both Lam Research and Advanced Micro Devices dropped about 3%.

The move came even after Dutch chip-equipment maker ASML posted strong results. CNBC reported that ASML lifted its full-year sales guidance for the second time this year, projecting revenue of 43 billion euros to 45 billion euros, above analysts’ expectations. The company also laid out plans to increase production of its extreme ultraviolet lithography machines, equipment used to make advanced chips.

That gap between strong company updates and falling share prices points to a common market dynamic: stocks can decline when investors decide expectations have already moved too far. In fast-rising sectors, good news may not be enough if valuations, meaning the prices investors pay relative to earnings or sales, are already stretched.

Louis Kondratev, a trader at XFUNDs, told CNBC the pullback reflects how crowded semiconductor trades have become after a long AI-led run. He said semiconductors now account for about 20% of the S&P 500, compared with just over 8% during the dot-com bubble in 2000 and a historical range of 2% to 5%.

Kondratev said earnings momentum has been strong, but concentrated in semiconductors. He told CNBC that momentum may begin to slow as investors reassess valuations.

SK Hynix had already posted its steepest one-day decline on Monday, CNBC reported, as investors took profits amid rising concerns about AI spending. Thursday’s drop shows those concerns are still hitting the sector, even as demand tied to AI remains a major theme for chip companies.

This story draws on original reporting from CNBC.