SK Hynix, ASML and SoftBank Stocks: Global Tech Disruption and AI Funding Concerns

The sell-off in global tech hardware stocks deepened Thursday, with Asian and European chipmakers tracking Wall Street’s losses as concerns over further interest rate hikes from the Federal Reserve, funding for investments in artificial intelligence and intensifying competition weigh on sentiment.

South Korean chip giant SK Hynix plunged more than 10%, while rival Samsung Electronics fell 8.73%. Other South Korean chip-related stocks have also been under pressure. LG Innotek fell 8.95%, Seoul Semiconductor fell 9.28% and Samsung SDI fell 6.26%.

In Japan, the technological investment giant SoftBank Group fell 7.9%. Semiconductor Test Equipment Manufacturer Avantest plunged nearly 14%, while chipmaking equipment supplier Tokyo Electron lost 6.45%. Renesas Electronics decreased by 8%. that of Taiwan TSMCthe world’s largest contract chipmaker, fell 1.81%.

In Europe, Dutch semiconductor giant ASML lost 6.6%, Infineon Technologies lost 9.4% and ASM International was down 9.6% and Nokia was down 5%.

The declines come as investors increasingly fear that rising borrowing costs will strain the massive capital spending needed to build AI infrastructure, putting pressure on tech companies that have benefited from the AI ​​investment boom.

Concerns about a global oversupply of memory chips as early as 2029, as manufacturers ramp up production capacity to meet growing demand for artificial intelligence, also appear to be weighing on sentiment.

China’s ChangXin Memory Technologies, or CXMT, said over the weekend it has achieved a breakthrough in a new architecture that can increase memory density by packing more data into a smaller space, signaling intensifying competition in the memory space. Elon Musk said in an article that China will produce “A LOT of RAM in 2028”.

The leaders of Broadcom And Intel, At the same time, warned on Monday that funding could become a major obstacle to the AI ​​boom, with Broadcom’s Hock Tan saying it could pose a bigger challenge to AI expansion than the shortage of chips or electricity.

The selloff follows a bruising session on Wall Street on Wednesday, where technology stocks led to wider market losses after higher-than-expected U.S. inflation data fueled fears that the Federal Reserve could raise interest rates further.

The tech-heavy Nasdaq Composite Index fell 1.88% to close at 26,692.87, while the S&P 500 lost 1.11% to end at 7,718.94. The Dow Jones Industrial Average slipped 0.09%.

Dan Ives, a technology analyst at Yorkville Ives, said the latest selloff in AI-related stocks reflects growing concerns about the cost of financing massive infrastructure projects as U.S. Treasury yields climb above 5%, but added that underlying demand for AI computing power remains robust.

“Higher yields increase the cost of financing these builds, and investors are right to focus on balance sheets and contract structure, but rates are a financing issue, not a demand issue,” Ives said in a note.

The latest pullback presents a buying opportunity, Ives said, adding that the AI ​​infrastructure boom remains in its early stages despite growing concerns about financing costs.

“What would change our view is a demand signal, not a rate signal,” he said, pointing to potential reductions in hyperscalers’ investment plans, contract cancellations or falling GPU rental prices as warning signs.