Chip War Heats Up Because of China, Korea Collapses, Dragged Down by America
Jakarta, CNBC Indonesia –Shares of Samsung Electronics and SK Hynix plummeted in trading on Tuesday (July 28th), triggering significant pressure on the South Korean stock market.
Shares of Samsung Electronics, South Korea’s largest memory chipmaker, plunged 13.4%. Meanwhile, SK Hynix, a major supplier of high-bandwidth memory (HBM) chips used in artificial intelligence systems, fell further, falling 14.7%.
The decline was Samsung’s worst in nearly two decades. The massive sell-off in both stocks also dragged South Korea’s KOSPI index down 10.8%.
The KOSPI recorded its biggest daily decline since the start of the conflict between the United States (US) and Iran in March.
Investors are weighing concerns about AI infrastructure financing, semiconductor stock valuations, and increasing competition from China.
Reports of Chinese companies developing domestic deep-ultraviolet (DUV) lithography equipment have rekindled concerns that Chinese memory chipmakers could expand production capacity more rapidly.
The pressure on SK Hynix was also evident in the US market. The company’s US-listed shares closed down 7.5% to US$143.02 on Monday (July 27). This marked the first time SK Hynix shares have fallen below their listing price of US$149 since their Nasdaq debut in early July.
SK Hynix supplies HBM chips to Nvidia, making its financial performance highly sensitive to AI spending expectations and demand for advanced processors.
The company is scheduled to announce its financial results on Wednesday, its first since going public on the Nasdaq.
From a market perspective, Samsung and SK Hynix together account for nearly half of the KOSPI index’s market capitalization. Therefore, the double-digit declines in these two stocks have put significant pressure on the South Korean benchmark index.
Investors will now be closely monitoring whether SK Hynix’s financial results support market expectations for HBM chip demand, and whether semiconductor equipment development in China can achieve sufficient levels of reliability, performance, and commercial scale to intensify competition in the memory chip industry.
SOURCE : CNBC INDONESIA
