Chip Selloff Triggers 6% Korea Rout After CEO's 'Casino' Warning

Korean Chip Giants Lead Losses

Samsung Electronics Co. and SK Hynix Inc. shares dropped more than 7% each on Tuesday, according to Bloomberg data cited by Moneycontrol. The two memory chip giants were headed for a fifth consecutive session of losses, underscoring the depth of the retreat in the South Korean equity market.

Kospi Slides Over 6%

The heavy weighting of Samsung and SK Hynix in South Korea's benchmark index amplified the damage. The Kospi dropped more than 6% during the session, as the country's market emerged as one of the hardest hit in the global semiconductor selloff.

US Chipmakers Slump Overnight

The weakness was not confined to Asia. US chipmakers slumped overnight, with fellow memory firm Micron Technology Inc. retreating 3.9%. The synchronized declines across the memory chip sector pointed to broad investor unease rather than company specific bad news.

Chinese Competition and AI Valuation Worries

Market participants pointed to two main drivers behind the rout: growing concerns over Chinese competition in the semiconductor space and worries that AI related valuations had become stretched. The selloff was further fueled by a warning from a CEO who compared the market to a casino, adding to jitters about the sustainability of the AI driven chip rally.

Sources: Moneycontrol · Financial Times · Techmeme