Samsung Electronics and SK Hynix shares fell over 5% Tuesday as competition from China grew. Investors worried about the future of the AI stock rally after Broadcom remarks. Ha SeokKeun said, “Uncertainty over whether the upcycle can last into 2028 and beyond appears to be weighing on valuations and share prices.”
Samsung Electronics Co. and SK Hynix Inc. shares extended their recent selloff, as concerns about Chinese rivals and the stretched artificial intelligence stock rally intensified.
The stocks dropped more than 5% each Tuesday, headed for a fifth-straight session of losses, dragging the Korean equity benchmark Kospi down as much as 4.7%. US chipmakers slumped overnight, with fellow memory firm Micron Technology Inc. retreating 3.9%.
Investors reacted to a report that China’s CXMT Corp. has made progress on a new memory architecture that Samsung and SK Hynix are also working on. Meanwhile, comments from Broadcom Inc.’s chief executive about the gambling-like qualities of AI stock investment fueled further worry.
“Uncertainty over whether the upcycle can last into 2028 and beyond appears to be weighing on valuations and share prices” of Korean chipmakers, said Ha SeokKeun, chief investment officer at Eugene Asset Management.
Meanwhile, South Korean bonds have stayed under pressure this year as the Middle East war fueled inflation concerns through higher oil prices, while surging Treasury yields added to the strain as traders bet on further Federal Reserve rate hikes.
Seoul has vowed measures to curb rising yields even as inflation remains above target and the booming semiconductor and memory-chip industries drive stronger-than-expected economic growth.
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