SK Hynix, SoftBank shares plunge as tech stocks in Asia track Wall Street chip sell-off

Asian technology stocks fell Tuesday as a sell-off in U.S. semiconductor shares spilled into regional markets, with worries over artificial intelligence financing and intensifying competition denting sentiment.

Shares of South Korean chip giant SK Hynix, a leading supplier of high-bandwidth memory chips used in artificial intelligence applications, plunged more than 8%, while rival Samsung Electronics shed 7.9% — both hit their lowest intra-day levels since August.

In Japan, shares of tech-focused investment giant SoftBank Group sank 8.03%. The group, which has significant exposure to the global AI industry, led a broader retreat in Japanese semiconductor and electronics shares.

Tokyo Electron, a major supplier of chipmaking equipment, dropped 6.6%, while Advantest, which makes semiconductor testing equipment, declined 5.38%. Other Japanese technology stocks also came under pressure. Lasertec fell 4.76%, Disco lost 4.83% and Renesas Electronics shed 5.89%.

The declines followed a weak session for technology stocks on Wall Street, where the Nasdaq Composite dropped 0.44% on Monday. U.S. memory chipmaker Micron Technology slid 3.9% as investors assessed intensifying competition from China's ChangXin Memory Technologies, or CXMT, which reported progress on a new chip structure.

Over the weekend, CXMT announced significant progress in developing a new chip architecture, designed to increase memory density by packing more data into a smaller space.

"Investors are jittery and looking for excuses to take profit on AI-related stocks that have outperformed this year, especially memory stocks," said UBP's senior equity advisor Vey-Sern Ling.

"In reality, while the Chinese memory makers can potentially become a threat to global demand-supply balance over time, in the short run they continue to face technology hurdles, especially for more advanced memory like HBM," Ling told CNBC via email.

CXMT shares were down over 2%.

## 'Vulnerable' AI sentiment?

Phillip Wool, chief market strategist at Rayliant Global Advisors, said CXMT's breakthrough marked a significant milestone for Chinese chipmakers, demonstrating their ability to overcome technology restrictions and potentially challenge established players sooner than expected.

But he cautioned that the market reaction appeared disproportionate to the immediate competitive threat, given that CXMT has yet to demonstrate large-scale production and continues to lag Samsung and SK Hynix in market share.

"More importantly, we're not even talking about HBM here, and the Korean chipmakers are still unquestionably dominating that space, with very little threat at all from the likes of CXMT or anyone else for the foreseeable future," Wool said.

He said the sharp sell-off reflected broader anxiety over the AI trade rather than a fundamental shift in the competitive landscape.

"I read that more as a sign of how vulnerable AI sentiment is at this moment," Wool said, warning that volatility could persist as investors reassess chip demand and how long semiconductor manufacturers can sustain their pricing power.

The chief executives of Intel and Broadcom have warned that access to capital could emerge as a major headwind to the AI boom, even as demand for computing infrastructure continues to outstrip supply.

Investors are also looking ahead to a busy week of corporate earnings and U.S. inflation data, which could provide fresh clues on the outlook for interest rates that often have an inverse correlation with growth stocks.