SK Hynix Plunges 10% as Asian Semiconductor Selloff Deepens

South Korean and Japanese semiconductor stocks dropped sharply on Tuesday as a broad selloff in chipmakers extended losses from Wall Street into Asian markets, with SK Hynix leading the declines.

SK Hynix plunged more than 10% in Seoul, while Samsung Electronics fell over 8%, underscoring how tightly Asian technology shares have become linked to the AI investment trade originating in the United States.

The selling was not confined to memory chipmakers. Samsung SDI dropped over 7%, LG Innotek slid nearly 14%, Seoul Semiconductor fell about 6%, and LG Chem lost more than 4%.

Japan's semiconductor sector also traded lower. Tokyo Electron dropped more than 9%, Advantest slid over 8%, and Kioxia — Japan's computer memory manufacturer — plunged more than 15%. SoftBank Group, a significant AI investment proxy through its stake in Arm, fell nearly 5%.

The declines followed a weak Monday session for U.S. chipmakers. The VanEck Semiconductor ETF lost more than 2%, adding to its losses from Friday. AMD and Teradyne dropped 5% and 4%, respectively, to lead the declines, while Micron Technology shed about 2%.

Samsung Electronics and SK Hynix are among the world's largest suppliers of high-bandwidth memory chips used in AI servers, making their shares particularly sensitive to shifts in expectations around spending by U.S. hyperscalers.

The broader pullback in AI infrastructure stocks has prompted concern about whether margin debt — borrowed money used to amplify investment positions — is exposing traders to outsized risk. Jim Cramer, host of CNBC's "Mad Money," warned on Monday that the AI trade has become increasingly fragile.

"If you're borrowing money to buy something related to the data center, then tomorrow morning, 9:30 a.m., sell it no matter what," Cramer said. "You won't regret it."

Cramer added: "If you're on margin, get off it. I no longer feel that you'll get out alive." He also suggested investors look beyond concentrated data center positions toward companies with more diversified revenue sources, pointing to building materials supplier CRH as one example.

The selloff comes alongside a widening geopolitical debate over AI supply chains. Chinese memory chipmaker CXMT made its Shanghai stock market debut this week, with shares surging to 49 yuan apiece on open after being priced at 8.66 yuan per share — a gain of roughly 470%. The Hefei-based company raised 57.92 billion yuan, equivalent to approximately $8.6 billion, in its IPO. CXMT held a 7.67% share of the global DRAM market in 2025, according to figures cited in its IPO prospectus.

The debut signals China's continued push to build domestic semiconductor capacity even as U.S. export restrictions have limited access to the most advanced chips for AI training for more than four years.

Whether investor confidence in AI infrastructure spending can stabilize — or whether the current pullback reflects a deeper recalibration of expectations — will likely depend on upcoming guidance from major U.S. hyperscalers and any signals from a planned meeting between U.S. President Donald Trump and Chinese President Xi Jinping, scheduled for late September, where AI policy is expected to be on the agenda.

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