Samsung and SK Hynix shares slide as AI chip rally faces financing and China fears

South Korean chip stocks slumped, with Samsung Electronics and SK Hynix falling as much as 9.5% and 11.1%, as investors pulled back from AI-related shares amid financing risks tied to AI infrastructure spending and intensifying Chinese competition, Reuters reported from Seoul. SK Hynix's U.S.-listed shares had already closed overnight at $143.02, below their $149 initial public offering price. The KOSPI was trading down around 8% as of 0120 GMT. SK Hynix is a key supplier of high-bandwidth memory chips to Nvidia and has been highly sensitive to shifts in AI-sector sentiment. Analysts linked the selloff to AI infrastructure financing concerns, Chinese technology advances, and rising competition from Chinese firms. Kiwoom Securities analyst Han Ji-young said reports that Chinese companies were developing domestic deep ultraviolet lithography equipment had cooled sentiment, even though companies, performance, and commercialization timelines were not yet disclosed. A Wall Street Journal report that Nvidia could provide a roughly $250 billion financial backstop for an OpenAI data-centre project sent Nvidia shares down nearly 5%. Growing use of low-cost Chinese open-source AI models such as Kimi K3 also raised questions about future demand for advanced AI chips and HBM. CXMT's strong market debut and reports that Apple had lobbied to use Chinese-made chips in some products further weighed on the sector.