On Tuesday, the stock prices of Samsung and SK Hynix fell by more than 10%. This caused the Kospi index in South Korea to fall by 11.5%. This was the lowest level since mid-April. Many investors are worried about the global artificial intelligence (AI) industry. They are also worried about competition from China.
Investors are selling chip stocks because AI companies are borrowing a lot of money. These companies take large debts to build new datacentres. People worry if these companies can spend this much money for a long time. For example, Nvidia is talking with OpenAI about a project in Ohio. This project might need $250bn for a large datacentre. These big costs make investors feel uncertain.
This problem is happening globally. The Nasdaq 100 index fell nearly 2% recently. It is now more than 10% below its high point from early June. This is called a market correction. A market correction happens when prices fall after they grow very fast. This is hard for South Korea because its economy needs the semiconductor industry.
There are two main reasons for this fall. First, people worry about AI spending. Second, Chinese companies are becoming strong competitors. China is making its own tools, like DUV tools, to make chips. This helps China rely less on other countries. For instance, the Chinese company CXMT saw its shares rise by 466% on the Shanghai stock exchange. This shows that Chinese chip companies are growing fast. This competition is a big challenge for Samsung and SK Hynix.