Six weeks. Four separate chip-stock selloffs. A combined $1 trillion wiped off Korea’s top four chipmakers. If you’re wondering whether the AI trade has hit a wall, you are not alone.
- SNDK stock is down 14%. See the chart and price action here.
The Pattern Is Getting Hard to Ignore
This isn’t a one-off panic. The Kospi has now suffered repeated double-digit single-session drawdowns since late June — 10% on June 23, another 9% on July 13, and 10.8% overnight — each one tripping circuit breakers and each one centered on the same two stocks: Samsung Electronics and SK Hynix.
Korea-listed SK Hynix is now down 47% from its June peak; Samsung is off 38%, per Trade Nation’s David Morrison. That’s not a dip — that’s a trend.
Leverage, Not Fundamentals, Is Doing the Damage — So Far
The bull case hinges on one distinction: analysts keep framing this as a “positioning unwind,” not a demand collapse.
DRAM and NAND inventories remain near historic lows, and Korea Investment & Securities’ downgrade of SK Hynix’s Q2 estimate was still framed around margin timing, not a broken AI story.
Tech analyst Dan Ives called the June rout a “buying opportunity,” even as he warned of near-term “selling pressure and anxiety."
Barron’s has gone further, arguing the Kospi’s slide into a technical bear market still leaves room to “recover and trade higher over the next 18 months.”
But the Cracks Are Multiplying
Still, the list of pressure points keeps growing: a $26.5 billion SK Hynix (NASDAQ:SKHY) Nasdaq listing that triggered a classic “sell the news,” Samsung’s blowout earnings that still weren’t good enough for Wall Street’s AI expectations, reports of DeepSeek building its own chip, and now CXMT‘s staggering 470%+ Shanghai debut that made it China’s most valuable listed company.
Even Nvidia’s (NASDAQ:NVDA) bullish-sounding $500 billion AI-memory supply deal with SK Hynix and potential backing of OpenAI’s next datacenter buildout got read as red flags about capex burn rather than confidence.
The Real Test
The tell will be whether this stays a Korea-specific, leverage-driven story or genuinely spreads to US names with cleaner balance sheets — Micron Technology (NASDAQ:MU), Advanced Micro Devices (NASDAQ:AMD) and Marvell Technology (NASDAQ:MRVL).
Tuesday’s market action, with Micron down over 10%, AMD and Intel Corp. (NASDAQ:INTC) down 9% and SanDisk (NASDAQ:SNDK) off more than 14%, suggests it’s already spreading.
Whether that’s contagion or a healthy repricing of an overheated trade is the multi-billion-dollar question heading into this week’s Big Tech earnings and AI capex commentary.
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