AI-linked semiconductor and technology shares are facing a sharp, synchronized selloff across South Korea and Japan, with the pressure now broadening beyond isolated profit-taking into questions about Chinese memory competition, AI monetisation and rising financing costs.
On Monday, South Korea's KOSPI fell as much as 3.15% before paring losses to close down 2.57% at 6,459.69. Foreign investors sold a net 1.36 trillion won of shares, institutions unloaded another 850 billion won, and retail investors bought more than 1 trillion won into the decline. Samsung Electronics fell 2.86% and SK Hynix lost 3.15%.
The selling accelerated on Tuesday after Japan reopened from a holiday. By mid-morning in Seoul, Samsung had dropped 8.8% and SK Hynix 9.3%, dragging the KOSPI down more than 6%. In Tokyo, SoftBank lost 8.1% as investors reassessed its heavy exposure to OpenAI and AI infrastructure financing.
A new competitive threat added pressure on Korean memory makers. ChangXin Memory Technologies, or CXMT, said it has made progress on a 4F² DRAM cell architecture and plans to launch DDR5 server memory using the technology by year-end. The design could reduce cell area by roughly one-third compared with the dominant 6F² structure, potentially increasing density. While CXMT has not proven it can manufacture the technology reliably at scale, the announcement challenges assumptions about concentrated supply and exceptional memory margins.
The pressure comes despite strong fundamentals. Samsung last week forecast a record 107.4 trillion won quarterly operating profit, helped by AI-driven memory shortages. SK Hynix and Samsung have nevertheless become targets because investors increasingly believe future competition could weaken scarcity pricing.
SoftBank faces a different version of the same concern. It completed a $30 billion follow-on investment in OpenAI this month, taking its cumulative investment to $64.6 billion and ownership to about 13%. CEO Masayoshi Son is also reportedly seeking up to $100 billion from Gulf investors for further AI investments, making SoftBank highly sensitive to doubts about whether AI revenues justify enormous capital commitments.
Macroeconomic conditions are intensifying the selloff. Brent crude traded around $105.90, while the US 10-year Treasury yield remained near 5.21%, close to last week’s 24-year high. Saxo strategist Charu Chanana told Reuters: “Markets are rediscovering that geopolitics matters most when it feeds back into inflation.” Higher oil threatens inflation, while elevated yields increase the discount rate applied to future AI profits, forcing AI-heavy stocks to clear a higher valuation hurdle.
Elsewhere in Asia, the selling was less severe. Taiwan slipped about 0.5%, with TSMC still expected to report a sixth consecutive record quarterly profit and net income forecast to jump about 65% to T$746.3 billion. Chinese blue chips were little changed, Hong Kong and Australian shares advanced, and Indian equities opened higher, helped by lower crude prices and Reserve Bank of India measures that strengthened the rupee.
