Those who were reassured yesterday by the phrase “overreaction” may have trouble sleeping after this morning’s market open. October 13 was a “Black Tuesday” for South Korean stocks: SK Hynix plunged 10.09% in a single day, closing at 1,443,000 won; Samsung Electronics fell 7.39%, closing at 232,000 won; and the KOSPI plunged more than 7% intraday. Even more striking was the flow of funds: foreign investors net sold 2.02 trillion won worth of KOSPI blue chips in a single day, including 1.04 trillion won in SK Hynix shares alone. Foreign ownership fell below 50%.
The trigger was once again CXMT: on October 10, CEO Cao Kanyu announced that the company would begin mass production of DDR5 server memory based on a 4F² architecture before the end of the year, with cell area about one-third smaller than the mainstream 6F² design. Samsung, meanwhile, has set 2028 as its mass-production target for the same technology. Fears that the technology gap is closing spread to U.S. markets overnight: the Philadelphia Semiconductor Index fell 2.67%, and Micron closed down 4%.
But analysts are already divided. Phillip Wool of Rayliant said the market reaction was out of proportion to the actual threat, as CXMT has yet to prove it can mass-produce the chips. Charu Chanana of Saxo, meanwhile, said CXMT was merely the trigger; the real issue was growing doubts about whether AI companies can sustain their profits. On top of that, Samsung and SK Hynix’s buyback programs are nearing their end, weakening institutional support for their share prices.
The knock-on effect on crypto is straightforward: the AI hardware narrative has been one of the underlying drivers behind the simultaneous rise in tech stocks, $BTC , and $ETH this cycle. Turmoil in the memory sector → shrinking risk appetite → pressure on crypto. Tonight’s CPI release at 20:30 Beijing time is the key variable: if the numbers are moderate, tech stocks and crypto can catch their breath together; if inflation comes in far hotter than expected, risk aversion will continue to weigh on the AI supply chain.
At this stage, the memory race is no longer about who has the more advanced technology, but who can turn capacity into profits first. Fear spreads quickly, but reason can return just as fast. Still, before tonight’s CPI release, don’t rush to buy the dip.
#SKHynixSharesDrop7.1%
#AI #Chips
The above does not constitute investment advice. DYOR; trading involves risk.
The trigger was once again CXMT: on October 10, CEO Cao Kanyu announced that the company would begin mass production of DDR5 server memory based on a 4F² architecture before the end of the year, with cell area about one-third smaller than the mainstream 6F² design. Samsung, meanwhile, has set 2028 as its mass-production target for the same technology. Fears that the technology gap is closing spread to U.S. markets overnight: the Philadelphia Semiconductor Index fell 2.67%, and Micron closed down 4%.
But analysts are already divided. Phillip Wool of Rayliant said the market reaction was out of proportion to the actual threat, as CXMT has yet to prove it can mass-produce the chips. Charu Chanana of Saxo, meanwhile, said CXMT was merely the trigger; the real issue was growing doubts about whether AI companies can sustain their profits. On top of that, Samsung and SK Hynix’s buyback programs are nearing their end, weakening institutional support for their share prices.
The knock-on effect on crypto is straightforward: the AI hardware narrative has been one of the underlying drivers behind the simultaneous rise in tech stocks, $BTC , and $ETH this cycle. Turmoil in the memory sector → shrinking risk appetite → pressure on crypto. Tonight’s CPI release at 20:30 Beijing time is the key variable: if the numbers are moderate, tech stocks and crypto can catch their breath together; if inflation comes in far hotter than expected, risk aversion will continue to weigh on the AI supply chain.
At this stage, the memory race is no longer about who has the more advanced technology, but who can turn capacity into profits first. Fear spreads quickly, but reason can return just as fast. Still, before tonight’s CPI release, don’t rush to buy the dip.
#SKHynixSharesDrop7.1%
#AI #Chips
The above does not constitute investment advice. DYOR; trading involves risk.