SK Hynix to Samsung Electronics: Tech titans tumble as AI bets face doubts

A sharp selloff in South Korean chipmakers fuelled concerns over the sustainability of artificial intelligence spending, dragging equity markets lower worldwide

A global tech rout dragged markets lower on Tuesday, with South Korean chipmakers’ selloff reigniting concerns over the sustainability of the AI rally. The Sensex and Nifty 50 fell 1.2 per cent each, their biggest declines in June. “Tech is leading markets lower as a heavy selloff in Asian chipmakers is dragging equities down amid valuation and capex worries,” said Tom Essaye, founder of the Sevens Report, in a Bloomberg report. South Korean giants SK Hynix and Samsung Electronics fell nearly 13 per cent amid fears that AI spending and chip demand may have peaked. Micron’s stock in the US dropped 9 per cent.  

Valuation shakeout 

AI stocks turn volatile: US tech sentiment weakened as investors questioned stretched AI valuations, with focus shifting to Micron Technology results for AI-memory demand signals

  HBM concerns spark selling: Reports that SK Hynix may slow HBM4 memory expansion raised concerns that AI chip 

demand may be peaking

  Selloff driven by positioning: Analysts see the pullback as a valuation and crowded-trade reset, not a collapse in AI 

fundamentals

  SK Hynix, an AI winner: A key high bandwidth memory (HBM) supplier to Nvidia and Google, its shares are up more than 340% this year and market value has surpassed Samsung Electronics and Micron

  Index concentration risk: Samsung Electronics and SK Hynix together account for over 50% of Kospi’s weighting and mcap

  Korean challenge: The Kospi has surged 94.7% this year but faces risks from a weaker won, high margin debt (borrowing 

to buy stocks), and 

foreign selling

  US tech cools: Nasdaq has pulled back on overheating concerns, though many investors see it as a correction, and not a trend reversal