SK Hynix plunges as semiconductor selloff deepens; Samsung, Softbank

South Korean semiconductor shares tumbled on Tuesday, extending a rout in chipmakers after another weak session on Wall Street.

SK Hynix plunged more than 10%, while Samsung Electronics fell over 8%. Other AI-linked names also came under heavy selling, with Samsung SDI dropping over 7%, LG Innotek sliding nearly 14%, Seoul Semiconductor falling about 6% and LG Chem losing more than 4%.

Japan’s semiconductor sector also traded lower. Tokyo Electron dropped more than 9%, Advantest slid over 8%, while SoftBank Group, a major AI investment proxy through its stake in Arm, fell nearly 5%. Shares of Japan computer memory manufacturer Kioxia plunged more than 15%. Taiwan’s TSMC was down over 2%.

The selloff followed another weak session for U.S. semiconductor stocks on Monday. The VanEck Semiconductor ETF (SMH) lost more than 2%, adding to its Friday losses. AMD and Teradyne dropped 5% and 4%, respectively. Micron Technology shed about 2%.

The weakness underscores how closely Asian technology shares and the U.S. AI trade have become intertwined.

Samsung Electronics and SK Hynix are among the world’s largest suppliers of high-bandwidth memory chips used in AI servers, making their shares particularly sensitive to shifts in expectations for spending by U.S. hyperscalers.

Sharp swings in SK Hynix shares underscore the uncertainty surrounding the AI investment cycle, said Acadian Asset Management’s senior vice president Owen Lamont, arguing that investors still have little visibility into how the technology will ultimately affect the economy.

“Right now we’re facing an incredible uncertainty,” he told CNBC. “No one has any idea how this AI process is going to affect our economy, and so I think it’s going to be rocky no matter what.”

Lamont also added that leveraged exchange-traded products could be adding to market swings, even if they are not solely responsible for SK Hynix’s recent volatility.

“More generally, the entire ecosystem of levered ETFs in Korea, also in Hong Kong and in the United States, are possibly adding volatility and magnifying market fluctuations.”