Asian Tech Stocks Slide as SK Hynix Drops Nearly 10% on AI Spending Fears
A sharp sell-off swept through Asian chip and tech stocks on Thursday, but analysts say the underlying AI investment story has not changed.
Key points
- SK Hynix, South Korea's largest memory chipmaker, fell 9.71% on Thursday, July 24, 2026.
- Samsung Electronics dropped 6.13% and Japan's Kioxia declined 8.84% in the same session.
- J.P. Morgan said in a Wednesday note that the Asian tech sell-off has not disrupted the AI investment cycle.
- S&P Global reported on August 5 that global output of tech equipment grew in July at its fastest pace since May 2021.
- SoftBank Group had surged more than 13% the previous day, illustrating the extreme swings hitting the sector.
Thursday was a rough day for anyone holding Asian technology shares. Stocks fell hard across the region, following a pullback overnight on Wall Street, as investors grew anxious about whether the enormous sums being poured into artificial intelligence can keep delivering returns.
The damage was sharpest in South Korea. SK Hynix, one of the world's biggest makers of the high-bandwidth memory chips, a specialised type of computer memory designed to feed data to AI processors at very high speed, lost 9.71%. Samsung Electronics, which makes both consumer gadgets and semiconductors, fell 6.13%. Seoul Semiconductor dropped 4.27%.
Japan felt it too. SoftBank Group, the Tokyo-based technology investment giant, slid 4.36%. Tokyo Electron, which makes equipment used to manufacture chips, fell more than 5%. Kioxia, a Japanese flash-memory chipmaker, dropped 8.84%. Taiwan's TSMC, the world's largest contract chip manufacturer, meaning it makes chips designed by other companies, declined 1.46%.
The moves were jarring. But they came just one day after SoftBank had soared more than 13%, which tells you something about how violently this market is swinging right now.
What is driving the volatility?
Worries about AI spending are the short answer. Some investors have started questioning whether big technology companies, often called hyperscalers, the giants who run massive cloud computing networks, will keep spending billions on AI infrastructure or eventually pull back.
J.P. Morgan pushed back on that fear directly in a Wednesday note, first reported by CNBC Tech. The bank said it sees no fundamental signs of meaningful weakness over the next six to twelve months and does not expect hyperscalers to cut their AI budgets.
The data backs that up. S&P Global reported on August 5 that global output of tech equipment, as measured by the purchasing managers' index, a monthly survey of factory and services activity, grew in July at its fastest rate since May 2021. Software and IT services demand rose alongside it.
Should ordinary investors be worried?
Daily stock moves, even steep ones, rarely reflect what a sector will do over months or years. Analysts remain broadly optimistic. The swings reflect anxiety, not evidence of a slowdown.
That said, anyone with savings in funds that hold semiconductor stocks, whether through a pension or a brokerage account, should expect continued short-term turbulence. The chip sector is tightly tied to AI sentiment right now, and that sentiment can shift fast.
The underlying picture, as J.P. Morgan frames it, is still one of strong AI demand driving steady chip orders. A bad Thursday does not change that.
Common questions
Why do AI fears hit memory chip companies so hard?
AI systems consume enormous amounts of memory to process data. When investors worry about AI spending slowing down, memory chipmakers like SK Hynix and Samsung are among the first stocks to fall because their biggest customers are AI data centres.
What is a hyperscaler, and why does its spending matter?
A hyperscaler is a company, such as Amazon, Google or Microsoft, that runs very large cloud computing networks. They are the biggest buyers of AI chips and the companies whose spending decisions move the whole semiconductor market up or down.
