The global sell-off in memory chip stocks deepened overnight as South Korea’s benchmark KOSPI (^KS11) fell 7%.
Micron (MU) and SK Hynix (SKHY) were poised to open lower on Wednesday as SK Hynix (000660.KS) and Samsung Electronics (005930.KS) fell 10% and 8%, respectively, after falling earlier this week on concerns about intensifying Chinese competition. The two memory giants represent more than half of the total capitalization of the South Korean stock market.
The selloff in South Korea follows a decline in the chip sector on Wall Street on Wednesday, as worries about further rate hikes collide with fears of AI-driven debt financing.
Chip giant Nvidia (NVDA), Broadcom (AVGO), AMD (AMD) and Intel (INTC) all led chip stocks lower during the session.
5,580.82 -427.99 (-7.12%)
At 14:03:20 GMT+9. Open market.
Concerns over borrowing costs also hit AI trading on Wednesday.
CoreWeave (CRWV) stock fell more than 15% after a chart of neocloud providers’ bond yields was shared on social media.
The stock’s sharp selloff highlighted concerns about the company’s heavily leveraged balance sheet and its ability to scale quickly enough to handle its growing interest expenses.
Any slowdown in AI spending could spell trouble for chipmakers, which have been the biggest beneficiaries of infrastructure spending as hyperscalers rush to build data centers.
Investors will get another look at the health of AI development on Thursday when TSMC (TSM) reports quarterly results. Investors expect quarterly profits to rise 60%.
Investors will be paying close attention to smelter capacity, given ASML’s (ASML) results on Wednesday. The maker of advanced chipmaking machines warned it may not be able to fully meet demand in 2027 and 2008.
Ines Ferre is a senior economics reporter for Yahoo Finance.
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