Asian markets took a sharp hit on July 28, 2026, as fears around Samsung and SK Hynix stock performance spread across the region. Shares of the two South Korean memory-chip giants plunged double digits in a single session, dragging down the broader Seoul market and rattling investor confidence in the AI chip boom.
In this post, we’ll break down what happened, why it happened, and what it means for the semiconductor and AI sectors going forward.
What happened to the stocks of SK Hynix and Samsung?
Two of the biggest chipmakers in the world lost a large portion of their value due to the abrupt and severe selloff.
- Samsung Electronics shares plunged as much as 13.4% during the session.
- SK Hynix shares dropped even further, falling as much as 14%.
- Together, Samsung and SK Hynix make up nearly half of South Korea’s benchmark KOSPI index, which fell about 9.4% as a result.
- At one point, the KOSPI dropped as much as 9.19%, hitting its lowest level since April 20.
- Trading was so volatile that temporary restrictions on program trading were triggered to calm the market.
The impact wasn’t limited to South Korea. Japan’s Kioxia Holdings, a flash memory-chip maker, slumped nearly 18%, while Taiwan’s MediaTek fell more than 9%. Japan’s Nikkei 225 also dropped as much as 4%, and the Topix index fell 2.91%.
Why Did the Stocks Fall So Sharply?
This wasn’t a single-cause crash. A combination of factors came together at once to spook investors.
1. Worries Over AI Infrastructure Financing
A Wall Street Journal report suggested that Nvidia could provide roughly $250 billion in financial backing for an OpenAI data center project. This raised a red flag for investors, who began questioning whether Nvidia was essentially financing its own customers to keep AI-related demand looking strong. Following the report, Nvidia’s own shares fell nearly 5%.
Since SK Hynix is one of Nvidia’s key suppliers of high-bandwidth memory (HBM) chips, its stock is especially sensitive to shifts in sentiment around Nvidia and the broader AI spending story.
2. Rising Competition From China
Reports emerged that Chinese companies are developing their own domestic deep ultraviolet (DUV) lithography equipment, a critical piece of technology used to manufacture advanced chips. According to Han Ji-young, an analyst at Kiwoom Securities, this reignited concerns that:
- Chinese memory-chip makers could accelerate their capacity expansion
- Global competition in the memory-chip market could intensify
- South Korean chipmakers could face a shrinking competitive edge over time
Importantly, details like which companies are involved, how well the equipment performs, and when it might be commercialized haven’t been disclosed yet. But even the possibility was enough to shake investor confidence.
3. Doubts About Sky-High Valuations
Chip stocks, especially those tied to AI, have seen massive gains over the past year. SK Hynix’s shares alone had jumped around 30% earlier this year, driven largely by optimism around its partnership with Nvidia. With valuations already stretched, any negative news was likely to trigger a sharper-than-usual reaction, and that’s exactly what happened.
Notably, this drop came despite Samsung posting stronger-than-expected earnings earlier in the month and Alphabet doing the same the week before. Strong fundamentals weren’t enough to hold back the broader wave of sector-wide anxiety.
SK Hynix Falls Below Its US Listing Price
One especially notable detail from this selloff: SK Hynix’s US-listed shares closed 7.5% lower overnight at $143.02, dropping below its $149 initial public offering price for the first time since its debut earlier this month.
This is a meaningful milestone. It shows that investor sentiment toward SK Hynix has cooled to the point where the stock is now trading below where it started when it first listed in the US, despite the company’s strong ties to the AI boom through Nvidia.
What This Means for the Semiconductor and AI Sector
This selloff highlights a few bigger themes worth watching:
- AI stock sensitivity: Companies closely tied to AI infrastructure, like SK Hynix, are highly reactive to any news that questions the sustainability of AI spending.
- China’s growing chip ambitions: Even early-stage reports about Chinese lithography technology can move markets, showing how seriously investors are tracking China’s progress in semiconductor manufacturing.
- Valuation risk: After a long rally, chip stocks may be more vulnerable to sharp corrections, since high valuations leave less room for error.
- Global markets are interconnected: The impact on Taiwanese and Japanese chip stocks demonstrates how interconnected the Asian semiconductor supply chain is.
Final Thoughts
The sharp fall in Samsung and SK Hynix stocks is a reminder of how quickly sentiment can shift in the AI-driven chip sector. A mix of financing concerns around Nvidia’s AI investments, early signs of rising Chinese competition, and already-stretched valuations combined to trigger one of the sharpest single-day drops for these companies in recent memory.
Whether this is a temporary correction or the start of a longer slowdown will depend on how the AI financing story unfolds and how quickly Chinese chipmakers can turn early-stage technology reports into real competitive threats. For now, investors across Asia are watching closely for the next signal.
