Chip Stocks Losing Their Shine Spells Trouble for South Korea
Translate
The gloss is rapidly coming off chip manufacturers, which were the clear winners in the first half of the year amid the frenzy for AI.
Take a look at Samsung. The shares are back to where they were in late May after tumbling 21% from its June high. Fellow peer SK Hynix has lost 25%. Japan’s Kioxia is down 30% from last month’s peak. In the US, Micron and Sandisk both closed more than 10% lower overnight.
There are rising concerns over an excess in AI capacity, seen for instance in Meta’s plan to sell computing power, but really it seems gravity is catching up to stocks that sucked in funds from almost every other sector. Continued losses would challenge markets that have become reliant on these companies, especially South Korea — where the Kospi doubled in just six months.
In China too, the tech-heavy ChiNext was down 5.7% on Thursday in its biggest loss since April 2025. The gauge rallied 36% in the first half.
“AI-related stocks have moved up a lot and expectations are high,” said Joshua Crabb, head of Asia Pacific equities at Robeco in Hong Kong. “So we get periodic selloffs and any bad news triggers profit taking.”
The question is, will investors return to these stocks with the same enthusiasm as before, or will the fear of being burnt keep them away.
What You Need to Know Today
The SEC is said to be looking into Susquehanna’s allegations that unknown insider traders made $100 million on options bets ahead of a recent Chinese regulatory crackdown on cross-border brokerages.
Susquehanna went public with its claims in a lawsuit filed Monday in Manhattan federal court. The US Securities and Exchange Commission is examining the trades described in the market-making firm’s complaint, according to a person familiar with the matter.
Pennsylvania-based Susquehanna said in its suit that it lost more than $70 million as counterparty on most of the alleged insider trades. According to the complaint, the traders bought US exchange-traded options in Chinese securities firms that were subsequently targeted in a May 22 crackdown.
OpenAI has begun preliminary discussions about giving the US government a 5% stake in the ChatGPT-developer, the Financial Times reported, citing two people familiar with the talks.
OpenAI CEO Sam Altman and other executives proposed that move as part of a broader arrangement under which Washington would hold 5% of each of the leading US AI developers, the FT reported. That might include Anthropic and listed sector leaders Google and Meta, though it’s unclear if those other firms would agree with the proposal, the newspaper said.
Russia unleashed one of the most intense missile and drone attacks on Kyiv so far this year, killing at least 10 people and injuring dozens, according to Ukrainian officials.
Residential areas in seven city districts were damaged in the overnight attacks and medical staff of an ambulance substation were among the injured, Kyiv Mayor Vitali Klitschko said on Telegram. Ukraine’s Air Defense said ballistic and cruise missiles were used in the assault on Kyiv as well as jet-powered drones, while strikes were also reported in the Kharkiv and Sumy regions.
China warned two Japanese Coast Guard survey vessels to stop operating in the East China Sea in recent days, Japan’s top government spokesman said, unusual moves that highlight elevated tensions over sea border claims in the area and worsening diplomatic ties between Beijing and Tokyo.
Since Tuesday, the Japanese research ship Takuyo has received radio warnings from Chinese government ships to cease operations, Chief Cabinet Secretary Minoru Kihara said. Similar warnings have been received by another Japanese research vessel, the Koyo, he said.
More from Bloomberg
Enjoying Evening Briefing? Check out these newsletters:
- New: Get the On Books newsletter from Bloomberg Weekend for reviews and recommendations to expand your thinking. Also: Weather Watch — Get an edge on the risks of the changing climate with Bloomberg’s global team of reporters
- Coming soon: Get Next Japan for an inside view of the forces reshaping Japan, and what’s next for its businesses, markets and consumers.
- Markets Daily for what’s moving in stocks, bonds, FX and commodities, and Markets Daily India for key news before the trading day starts there
- Singapore Edition, India Edition and Hong Kong Edition for insights into some of Asia’s most dynamic economies
- Next China for dispatches from within the world’s second-largest economy on where China stands now — and where it’s going next
- Breaking News Alerts for the biggest stories from around the world, delivered to your inbox as they happen
- Explore all newsletters at Bloomberg.com
Comments
Post a Comment