Seoul-listed shares of Samsung Electronics Co. and SK Hynix Inc. (NASDAQ:SKHY) fell sharply on Monday, extending last week’s sell-off and dragging South Korea’s benchmark KOSPI index lower, as investors continued to assess the implications of China’s latest AI advances.
AI Chip Sell-Off Deepens
Samsung fell as much as 5.8% to KRW 2,40,000 ($162.28), and SK Hynix also fell 5.8% to KRW 17,35,000 ($1,172.76), extending a broader retreat in AI-linked stocks this month.
The sell-off followed renewed concerns that heavy spending on AI infrastructure has pushed valuations to unsustainable levels, prompting investors to lock in profits after months of strong gains.
The pressure on South Korean chipmakers contrasted with Taiwan, where the benchmark Taiex index slipped just 0.50% and Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) rebounded 1.31% after last week’s sharp decline.
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Chinese AI Breakthrough Adds Fresh Pressure
Investor sentiment was also weighed down by the rollout of Beijing-based Moonshot AI‘s Kimi K3 open-source model, one of the world’s top-performing open-source AI models.
The launch reinforced concerns that increasingly capable and lower-cost Chinese AI models are intensifying competition for U.S. developers and cloud providers, raising fresh questions about the long-term returns from massive AI infrastructure spending.
Samsung Cuts Jobs As Chip Demand Stays Strong
The pullback also comes after Samsung last week said its chip division was on track for a 19-fold jump in operating profit, driven by robust demand for AI memory chips.
According to a Reuters report, Samsung has cut jobs across its U.S. display, mobile, and consumer electronics operations as it relocates its U.S. headquarters from New Jersey to Texas.
South Korea’s financial markets were closed on Friday for Constitution Day, while Japan’s markets remained shut on Monday for Marine Day.
The KOSPI, the world’s best-performing major benchmark index this year, tumbled as much as 5% on Monday and was down 3.89%.
Price Action: Seoul-listed shares of Samsung Electronics were down 4.31%, while SK Hynix lost 3.42% at the time of writing.
U.S.-listed shares of SK Hynix rose 1.13% to close at $154.03 on Friday before slipping 0.31% in after-hours trading.
Benzinga edge rankings indicate SKHY has a Value score in the 43rd percentile and a Growth score in the 97th percentile.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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