Concerns over the sustainability of the artificial intelligence boom intensified this week, sending shares of major memory chip manufacturers sharply lower and raising broader risk-aversion signals that could spill into cryptocurrency markets.
Kioxia Holdings saw its stock continue a steep decline after issuing a soft outlook despite record profits. The company, a key partner to SanDisk, projected operating profit of approximately ¥2 trillion ($12.7 billion) for the December quarter, below the ¥2.35 trillion analysts expected. Kioxia management attributed the slowdown to shipment timing rather than deteriorating demand, noting some orders were pulled forward into the September quarter while others were pushed to the March quarter due to longer production lead times. The company said it is already sold out for next year and has begun negotiations with large clients for 2029 and beyond. Still, the stock has dropped nearly 70% from its year-to-date high, falling to ¥11,505 and nearing a potential death cross formation, with the next key target at ¥10,000.
Samsung Electronics and SK Hynix also plunged on Tuesday after Oracle announced plans to raise $20 billion — $10 billion via a share sale and $10 billion in bonds — to expand cloud computing capacity. The fundraising highlighted the financial strain facing major AI infrastructure providers. Samsung fell 4.59% to 218,500 won, while SK Hynix dropped 5.10% to 1,397,000 won in early Seoul trading. The KOSPI slid 3.36% to 5,662.37. Oracle shares had already tumbled 8.8% on Wall Street, with Micron Technology losing 5.8%. Despite record Korean semiconductor profits — Samsung reported Q3 revenue of 195.3 trillion won and operating profit of 107.4 trillion won, with its semiconductor division contributing 106.5 trillion won; SK Hynix delivered revenue of 104.6 trillion won and operating profit of 83.3 trillion won — investors increasingly question how long customers can finance rapid AI expansion.
Analyst commentary was mixed. BNK Securities' Lee Min-hee warned that growth in Big Tech's AI infrastructure investment could peak in the third quarter. Samsung Securities' Seo Jeong-hoon argued that funding capacity among large technology companies remained resilient and that worries were excessive. Korea Investment & Securities cut its Samsung price target to 440,000 won from 570,000 won but retained a buy rating. Kiwoom Securities' Han Ji-young suggested AI shares had already undergone a substantial correction and a period of sideways trading might be more plausible than another steep decline.
The sell-off reflects uncertainty about future returns rather than evidence of an immediate collapse in semiconductor orders. However, the risk-off mood in tech equities could dampen overall market sentiment and increase volatility across asset classes, including cryptocurrencies, which often track broader risk appetite.
