Asian chip stocks plunge after SK Hynix results disappoint

Shares in Asian chip and artificial intelligence-linked companies fell sharply on Wednesday after SK Hynix reported results that missed investor expectations. The sell-off pushed South Korea's Kospi index lower for a second straight day, with the benchmark sliding by as much as 12.6% at one point. The move also weighed on Samsung Electronics and other semiconductor names, extending a broader rout in the region's technology shares.

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SK Hynix said it had posted record second-quarter profits, but the figures still fell short of what investors had been looking for. Its shares dropped by as much as 16% after the announcement, according to the market move described in the row. Samsung Electronics also fell further, trading almost 10% lower, adding to pressure on an index heavily dominated by chipmakers.

The Kospi had already fallen nearly 11% the previous day and was at its lowest level since early April. The latest decline left the market on course for a record two-day fall, with the index more than 40% below a peak reached a little over a month ago. Together, SK Hynix and Samsung Electronics account for more than half of the Kospi's market capitalisation, which helps explain the scale of the index's reaction.

The sell-off matters because South Korea's equity market has become closely tied to the global AI investment cycle. SK Hynix makes chips that are central to the expansion of AI data centres, and both it and Samsung have benefited from investor enthusiasm around advanced memory chips. Analysts said the latest disappointment highlighted concern over how long technology companies can sustain heavy spending on AI infrastructure and related hardware.

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The reaction was not limited to South Korea. Japan's Nikkei also fell 1.5%, showing that the pressure on chip stocks was spreading across Asian markets. The row also noted that US chip companies had fallen on Wall Street on Tuesday, suggesting the weakness was part of a wider reassessment of the sector rather than a single-company move.

What remains unclear is how far the sell-off will extend and whether investors will continue to rotate away from AI-linked names. The immediate focus will be on whether chipmakers can reassure markets with stronger guidance, clearer long-term agreements or evidence of shareholder returns. For now, the episode underlines how quickly sentiment can shift in a sector that has been one of the main drivers of recent market gains.

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