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Asian Chip Stocks Drop As SK Hynix Earnings Disappoint
Topline South Korean stocks faced a second straight day of losses Wednesday, led by SK Hynix, as the memory chipmaker’s record AI-fueled earnings fell short of the market’s high expectations and were further dampened by concerns about chipmaking advancements in China.
South Korea’s benchmark KOSPI index fell nearly 13% on Wednesday—triggering a halt in trading—before closing 6% down.
The KOSPI index has fallen by more than 15% in the past two days amid concerns about the AI-fueled rally, which has boosted Korea’s top chipmaking stocks.
SK Hynix reported a near sixfold increase in operating profit to a record KRW 60.5 trillion ($42 billion) in the three months ending in June, but this fell short of market forecasts of around KRW 64 trillion ($44 billion).
This triggered a second straight day of selloff in SK Hynix shares, which tumbled nearly 19% before ending the day at KRW 1.4 million ($964)—down more than 9.6% from Tuesday’s close.
SK Hynix’s memory chipmaking rival Samsung Electronics’ shares also took a tumble on Thursday—falling 5.2%.
The sell-off hit other major chipmakers in Asia, including Japanese memory chipmaker Kioxia—whose stock fell 13.85% on Wednesday—and Taiwanese semiconductor giant MediaTek, which fell nearly 5%
Aside from SK Hynix’s earnings miss, the selloff comes amid concerns about advancements reported by Chinese chipmaking and AI companies. Memory chipmaker CXMT , which made its market debut earlier this week, saw its stock price soar an additional 12.6% on Wednesday, following a 466% gain on Monday after going public. Along with American semiconductor giant Micron, Samsung and SK Hynix control nearly 90% of the global RAM chip market, which is in high demand due to the ongoing build-out of AI infrastructure. CXMT, reportedly being courted by Apple as an alternative RAM supplier, is seen as a major emerging threat to the trio. China has also reportedly made major strides in advanced chip-making machines, which could threaten Dutch semiconductor giant ASML and Taiwanese chipmaker TSMC. ASML’s shares have fallen more than 11% in the past week, while TSMC’s stock has dropped more than 6.5%.
Despite the selloff in Asia, U.S. stock futures remained largely flat. Memory chipmaker Micron’s stock remained slightly below the closing price of $820 after plunging more than 8.8% on Tuesday. Chipmakers AMD, Intel and Qualcomm inched up slightly in early trading on Wednesday after declines of 8.1%, 5.8% and 4.2%, respectively, on Tuesday. Shares of AI chipmaking giant Nvidia—which ceded the title of the world’s most valuable company to Apple earlier this week—were also flat on Wednesday.
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