Samsung Electronics, SK Hynix and SoftBank Group slumped on Friday as Wall Street’s rout in artificial intelligence stocks spread across Asia, exposing concerns about the cost of financing the industry’s rapid expansion.
Samsung fell as much as 9.98% and SK Hynix 11.71% in early Seoul trading, while SoftBank dropped roughly 11% in Tokyo. South Korea’s KOSPI plunged more than 8%, triggering a 20-minute trading halt.
The Korean chipmakers later pared losses, but SoftBank faced the cost of insuring its debt against default reached a four-year high.
AI stock selloff spreads to Asia
The Nasdaq Composite lost 5.52% on Thursday, while the Philadelphia Semiconductor Index plunged 12.25%.
Nvidia dropped 9.26% and Micron Technology slid 17.46%, reflecting a broad retreat from companies tied to expanding data centres.
Democratic gains in Tuesday’s US midterm elections added fears of tougher oversight of data-centre construction.
Projects could face delays if new rules emerge, potentially affecting orders for chips, power equipment and other components across the region.
But no sweeping restrictions have taken effect. Investors were already questioning whether AI developers can earn enough to justify enormous spending, often financed through borrowing.
That anxiety has quickly crossed the Pacific, where Korean memory producers and Japanese technology investors depend heavily on US demand.
“There is also clearly an element of panic in the selling,” Saxo strategist Charu Chanana told Reuters.
Samsung and SK Hynix recover from double-digit falls
Samsung briefly fell to 181,400 won, down 9.98%, while SK Hynix declined 11.71% to around 1.116 million won. The KOSPI fell below 5,000, prompting an automatic circuit breaker at 9:03 am Seoul time.
By approximately 11:30 am, Samsung had trimmed its decline to 3.23% and SK Hynix to 5.30%. The KOSPI was down about 3.9%, helped by domestic buying despite foreign investors selling roughly 1.1 trillion won of shares.
The companies supply memory essential for AI servers. SK Hynix specialises in high-bandwidth memory used alongside advanced processors, while Samsung also supplies server DRAM and other chips.
Their current orders have not been shown to collapse. What is changing is investors’ confidence that customers will sustain construction and chip purchases at today’s pace.
Kiwoom Securities analyst Han Ji-young said the sell-off appeared excessive, according to Seoul Economic Daily on Friday. Neither the scope of possible US regulation nor any decline in AI demand had been established, she argued.
SoftBank stock crash today
SoftBank shares were down 9.87% at 10:55 am in Tokyo, while credit markets flashed a separate warning.
Its five-year credit default swap spread rose 22 basis points to 466 basis points, the highest since October 2022. The spread reflects the cost of insuring against default, not an actual default.
SoftBank has invested about $64.6 billion in OpenAI and owns roughly 90% of chip designer Arm. It has borrowed heavily to fund AI investments, while OpenAI’s delayed public offering has pushed a potential route to realising returns into 2027.
Futurum Group analyst Rolf Bulk warned in research that possible state-level restrictions could delay projects representing roughly one-third of planned US data-centre capacity.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
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