South Korean chip stocks plunge
Analysis based on 9 articles · First reported Jul 28, 2026 · Last updated Jul 28, 2026
The selloff in South Korean chip stocks reflects growing investor skepticism about the sustainability of the AI-driven semiconductor rally, potentially leading to reduced capital inflows into the sector. Concerns over AI infrastructure financing and Chinese competition may pressure valuations of major chipmakers globally.
On July 28, 2026, South Korean chip stocks experienced a sharp decline, with Samsung Electronics and SK Hynix falling as much as 9.5% and 11.1%, respectively. The selloff was driven by mounting concerns over AI infrastructure financing risks, intensifying competition from China, and reports of China's progress in developing domestic DUV lithography tools. A Wall Street Journal report that Nvidia could provide a roughly $250 billion financial backstop for an OpenAI data-centre project also weighed on sentiment. The growing popularity of low-cost Chinese open-source AI models like Kimi (chatbot) raised questions about future demand for advanced AI chips. Additionally, Chinese memory-chip maker ChangXin Memory Technologies's strong stock-market debut fueled concerns about global memory industry competition. The benchmark KOSPI index fell around 8%.
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