Kospi stock hits three-month low as SoftBank sinks 7%
South Korea's kospi stock market has slumped to a three-month low as an AI-led chip sell-off deepened across Asia, with SoftBank Group tumbling more than 7% and SK Hynix sinking over 10% after missing estimates despite record profit. Investors are fretting about AI spending, financing risks, and rising Chinese competition.
Key Takeaways
- South Korea's kospi stock index fell 11.5% on Tuesday to its lowest level since mid-April, according to The Guardian.
- On Wednesday, SoftBank Group lost more than 7%, SK Hynix slid over 10%, and Samsung Electronics lost more than 4%, CNBC reported.
- U.S. chip names also weakened overnight, with AMD down 8%, Intel nearly 6%, and Sandisk shedding 14%.
- Analysts point to AI financing worries, Chinese competition, and a pullback from earlier frothy valuations.
- Aberdeen Investments still sees long-term upside, calling the volatility a chance to buy quality names cheaper.
The latest slide in Asian technology shares followed another soft session for U.S. semiconductors. That pressure spilled into Seoul, Tokyo, Taipei, and mainland China, where chip-linked indexes and AI proxies led losses.
For readers tracking Future Tech & AI Wonders, the move underscores how quickly AI enthusiasm can reverse when funding and competition doubts resurface.
Why did kospi stock and other Asian AI names fall?
On Tuesday, investors dumped South Korean chip leaders amid concerns about heavy borrowing to fund datacentre buildouts. SK Hynix and Samsung Electronics each fell by more than 10%, dragging the kospi stock market down 11.5% to a three-month low, The Guardian reported.
Analysts also cited competition from cheaper Chinese players after reports that China had begun mass production of homegrown deep ultraviolet chip-making tools. Morningstar equity analyst Jing Jie Yu said the market was likely spooked by China's equipment progress, calling the reaction largely kneejerk and overdone.
Separately, Chinese memory chipmaker CXMT jumped 466% on its Shanghai debut Monday, highlighting Beijing's push to build a domestic AI supply chain. Investors have also grown uneasy about "circular funding," in which AI firms finance one another.
How far did SoftBank and chipmakers fall on Wednesday?
Asian technology stocks extended the sell-off on Wednesday. In South Korea, SK Hynix slid more than 10% after missing analysts' estimates despite record quarterly profit and revenue. Samsung Electronics lost over 4%, LG Innotek fell 9%, and Seoul Semiconductor dropped over 6%, according to CNBC.
In Japan, memory maker Kioxia was down 10% and Tokyo Electron fell 8.5%. SoftBank Group, viewed as a major AI investment proxy through its Arm stake, lost more than 7%. Taiwan Semiconductor Manufacturing Company was 1.32% lower. Mainland China's ChiNext 300 index lost 1.83%, while the Hang Seng China Semiconductor Chips Index fell more than 5%.
Overnight in the U.S., Nvidia sank at the open but closed flat. Intel dropped nearly 6%, AMD lost 8%, Micron and Seagate lost more than 8%, Western Digital sank nearly 7%, and Sandisk shed 14%. SK Hynix's U.S. shares dropped 9%.
Does the AI sell-off change the long-term outlook?
Not according to Aberdeen Investments' Kieron Poon, who linked Korea's weakness to ongoing deleveraging and softer global tech sentiment, but said volatility had not changed his firm's long-term positive view. He argued the pullback had brought valuations to more attractive levels.
David Riedel of Riedel Research Group told CNBC that investors were "giving back a little bit of the froth" in the AI market. Despite worries over AI financing and Chinese competition, he said the market was healthy and memory chipmakers would be fine after surrendering some sudden gains.
Hong Kong-listed Chinese internet names bucked the regional gloom: Tencent rose 3.6% and Meituan 2.7%, with Alibaba, Baidu, and Kuaishou also higher. London and European indexes had earlier moved up on Tuesday even as U.S. and Asian chip stocks struggled.