Shares of South Korean memory chip giant SK Hynix have been under pressure, erasing much of their 2026 gains as investors retreat from the semiconductor trade amid rising Chinese competition, tight NAND supply, and concerns about the sustainability of AI infrastructure spending.
Extending its sell-off, the stock fell another 11% in Thursday’s trade as concerns over Federal Reserve tightening and AI financing weighed on Asian technology stocks. Samsung Electronics also plunged 9%, dragging South Korea’s Kospi down nearly 8% and pushing it into bear-market territory, with the index falling about 21% from its September peak.
In Japan, SoftBank Group, a major investor in AI, tumbled 7.9%. Hotter-than-expected US inflation data fuelled concerns that the Federal Reserve could delay interest-rate cuts or even consider further hikes.
Investors fear that higher borrowing costs could constrain the massive capital expenditure needed to expand AI data centers and related hardware infrastructure, putting pressure on companies that have benefited from the recent AI boom.
Stock down 58% from peak
SK Hynix shares have remained lower for the last seven trading sessions, losing a cumulative 31%. The stock has now fallen 58% from its summer peak, reversing a significant portion of its earlier gains as one of Asia’s biggest beneficiaries of the AI-memory boom.
Yet, the stock is still up 93%. At its peak, it had surged a whopping 358%. It has ended each of the past three calendar years in positive territory, including a 274% jump in 2025.
Although the stock has been under pressure since the start of the second half of the year, the sell-off accelerated after Chinese memory chipmaker ChangXin Memory Technologies (CXMT) reportedly made significant progress in a new memory-cell design aimed at increasing storage density.
The area is also being pursued by major global memory makers, including Samsung Electronics, SK Hynix, and Micron Technology.
CXMT aims to introduce a new server-memory product based on the architecture by the end of 2026, company president Cao Kanyu said at an industry event in Shanghai over the weekend.
Concerns over the sustainability of AI spending have also been building for some time. In September, Anthropic CEO Dario Amodei called for a slowdown in the development of advanced AI, while OpenAI CEO Sam Altman also weighed in on the debate over the pace of AI development and the investment required to support it.
Altman had separately indicated that OpenAI would not go public this year, citing the need to focus on safety. OpenAI and Anthropic remain privately held, with both companies widely expected to consider public listings in the future.
AI bubble warnings
Warnings about the AI trade are also mounting, with Paul Tudor Jones, legendary hedge fund manager and founder and CIO of Tudor Investment, flagging that 2027 could be an extremely difficult year for US stocks, as several big-ticket technology IPOs, rising equity supply and mounting fiscal deficits threaten to weaken the market’s four-year bull run.
Last week, billionaire investor Ray Dalio described AI as a potential classic bubble approaching a possible breaking point, citing rising interest rates and the need for investors to convert wealth into cash.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
