South Korean chipmakers lead Asia declines as AI selloff deepens

AI spending concerns trigger semiconductor selloff

The KOSPI was last down 5%, with Samsung Electronics falling 7.5% and SK Hynix dropping 9.2%, extending weakness after a negative session on Wall Street. SK Hynix slid to its lowest level since June 17, and Samsung Electronics fell to its weakest level since June 8, underlining heightened caution over the sustainability of the recent AI-led chip rally.

The declines followed reports that Meta Platforms Inc is exploring a cloud infrastructure business to sell AI computing capacity, prompting concerns that hyperscale AI spending could become more disciplined. Additional reports that Apple Inc is evaluating memory chips from Chinese suppliers further pressured sentiment toward South Korea’s dominant memory producers.

U.S. peers were also under pressure. Memory maker Micron Technology Inc and storage company SanDisk Corporation both fell more than 10% overnight, reinforcing the negative tone for the global semiconductor sector. Despite this, Nasdaq 100 Futures and S&P 500 Futures were little changed as investors awaited fresh U.S. economic data.

Regional markets mixed as technology weakness spreads

The selloff extended along the broader semiconductor supply chain in Asia. Japan’s Nikkei 225 fell 1.6%, even as the broader TOPIX index edged 0.5% higher. Among Japanese chip-related names, Kioxia Holdings Corp tumbled 13.3%, Ibiden Co Ltd lost 7.9%, Murata Mfg Co and Furukawa Electric Co., Ltd. each fell 7.2%, and Mitsui Mining and Smelting Co. declined 9.6%, indicating broad-based selling among AI suppliers.

Taiwanese chipmakers, including TSMC, also came under pressure as investors reassessed lofty valuations following this year’s strong rally in AI-related stocks. Outside technology, SoftBank Group Corp. rose 1.5% after Reuters reported it had revived talks on a $10 billion loan backed by its OpenAI stake to support AI investment plans. KakakuCom Inc advanced after reports that Bain Capital and LY Corp had raised their takeover proposal for the online price-comparison operator.

Mainland Chinese markets were relatively more resilient but still lower, with the Shanghai Composite down 1.9% and the Shanghai Shenzhen CSI 300 slipping 0.9%, giving up earlier gains despite stronger manufacturing surveys and expectations of additional policy support. Australia’s ASX 200 eased slightly after an unexpected trade deficit in May raised concerns over softening overseas commodity demand.

Indonesia’s Jakarta Stock Exchange Composite Index rose 1.8%, while Nifty 50 Futures gained 0.4%. Regional economic data, including resilient factory surveys across China, Japan and Southeast Asia, as well as stable South Korean inflation and solid export growth, played a limited role in market moves, which were driven primarily by shifting expectations for global AI spending. Markets also remained cautious ahead of remarks from U.S. President Donald Trump later Thursday on trade and economic policy.

FAQ

What was the main driver of the market declines in Asia?
The main driver was a global selloff in AI-related and semiconductor stocks, prompted by concerns over more disciplined AI infrastructure spending and reassessment of high sector valuations.

How did major South Korean chipmakers perform?
Samsung Electronics fell 7.5% and SK Hynix dropped 9.2%, pushing the KOSPI down 5% and taking both stocks to their weakest levels in several weeks.

Which other markets and sectors were affected?
Japanese chip-related stocks such as Kioxia Holdings Corp, Ibiden Co Ltd, Murata Mfg Co, Furukawa Electric Co., Ltd., and Mitsui Mining and Smelting Co. saw significant declines, while Taiwanese chipmakers including TSMC also fell. Broader indices such as the Nikkei 225 and ASX 200 weakened, though some markets like Indonesia’s Jakarta Composite advanced.

Did economic data play a major role in Thursday’s moves?
No. While regional data showed broadly resilient manufacturing and stable South Korean inflation, market action was driven mainly by shifts in global technology and AI sentiment rather than changes in domestic economic fundamentals.