Japanese and South Korean chip stocks fell hard on Thursday, dragged down by another rough day for technology shares on Wall Street the session before. South Korea’s KOSPI index dropped 6.43%, slipping under the 8,000 mark to about 7,769 points, while Japan’s Nikkei 225 fell roughly 2% and lost the 70,000 level.

The steepest losses came from the two firms that supply much of the world’s memory chips. SK Hynix fell about 7.5%, and Samsung Electronics lost 6.84%. In Japan, memory maker Kioxia dropped 10%, dipping below 80,000 yen a share, and SoftBank slid as well. Because Samsung and SK Hynix together account for close to half the value of the entire Korean market, when they drop, the whole index goes with them.

The trigger came from New York. In Wednesday’s session on Wall Street, shares of Micron Technology dived more than 10%, even though the memory chipmaker is still up about 260% for the year, while Sandisk also shed more than 10%. When the biggest American chip names sell off, Asian suppliers usually feel it at the next open, and this time was no exception.

This matters well beyond stock tickers. Memory chips are the parts that store data in nearly every phone, laptop, car and data center. Samsung, SK Hynix and Micron make most of them, and the same AI building boom that has businesses racing to buy servers is what sent these stocks soaring in the first place. The KOSPI is up roughly 95% this year, one of the best runs of any market in the world. That kind of climb leaves little room for disappointment, which is why the pullbacks have been so violent.

What spooked buyers is a growing question about whether AI spending can keep justifying the prices. Traders have also been adjusting to a more hawkish stance under new Federal Reserve Chair Kevin Warsh, pricing in the chance of rate increases later this year. Higher borrowing costs make the debt-funded data-center buildout harder to pay for, and that weighs most on the chipmakers riding the AI wave.

Not everyone sees a crack in the story. Dan Ives of Wedbush Securities said his firm’s checks across Asia and enterprise AI demand showed “no cracks in the armor,” and argued the Korean selloff looked more like a pause after a near-100% rally than a sign of weakening demand. Peter Kim of KB Securities told CNBC that the real risk that ends chip upcycles — too much supply — is “at least a couple of years” away. Both point to the same thing: the companies are still cheap by past standards. Samsung trades at about six times forward earnings and SK Hynix at about 5.3 times, a fraction of Nvidia’s multiple.

The Korean companies, for their part, are spending like the boom is here to stay. SK Hynix CEO Kwak Noh-jung used a public briefing in Asan, south of Seoul, to lay out a plan to build AI data centers across the country in phases, starting at 5 gigawatts of capacity and scaling to 15. That came days after the South Korean government announced initiatives on Monday for Samsung and SK Hynix to invest a combined 800 trillion won in a national semiconductor project aimed at meeting demand for the high-bandwidth memory that AI servers depend on.

There is also a milestone coming for American investors. SK Hynix is set to begin trading American depositary receipts on the Nasdaq on July 10, giving U.S. buyers a direct way into a stock that has been at the center of this year’s whipsaw.

For everyday readers, the takeaway is simpler than the market swings suggest. These are the companies that make the memory inside the devices people use and the servers powering the AI tools showing up at work. When their shares lurch 7% to 10% in a session, it is a sign that the market is still arguing over how much the AI boom is really worth — not that the chips themselves have stopped selling. Foreign investors have been quick to pull money out on down days and pile back in on up days, which is why Seoul and Tokyo have swung so sharply from one morning to the next.

Whether Thursday’s drop is another quick dip or the start of something deeper will likely hinge on the next round of U.S. tech earnings and on how far the Fed leans toward raising rates. For now, the pattern of the past few months is holding: Wall Street sneezes on chips, and Asia catches the cold by morning.

JBizNews Desk
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