Asian chip stocks plunge as AI financing fears and China competition weigh

The semiconductor sell-off spread to Asia on October 13, with SK Hynix falling more than 8% and Samsung Electronics losing 7.9% during Tuesday trading. Concerns about financing the AI infrastructure boom and Chinese memory-chip competition weighed on sentiment, even as analysts questioned whether the competitive threat justified such steep losses.

The retreat reaches memory suppliers and equipment makers

Both Korean memory makers touched their lowest intraday levels since August. SK Hynix supplies high-bandwidth memory, or HBM, used in AI applications. The losses reached beyond memory: Japanese chipmaking-equipment supplier Tokyo Electron fell 6.6%, while semiconductor-testing equipment maker Advantest declined 5.38%.

SoftBank Group, whose investments give it significant exposure to the global AI industry, dropped 8.03%. CNBC’s market coverage recorded those moves during Tuesday trading, rather than as closing prices. They followed Monday’s 0.44% decline in the Nasdaq Composite and a 3.9% regular-session drop in U.S. memory maker Micron.

The U.S. retreat had already stretched across several sessions. SanDisk lost 6% in Monday’s regular session, the second-largest decline in the Nasdaq-100. The iShares Semiconductor ETF ended lower for a fifth consecutive session. Stocktwits also reported further declines in overnight trading late Monday:

• Micron fell another 2.7%, while SanDisk dropped 3.3%.
• Intel declined 2.5%, and AMD lost 1.7%.

The financing warning comes from chip executives

Broadcom CEO Hock Tan warned Monday that access to capital could become a bigger constraint on AI expansion than shortages of chips or electricity. Speaking at the DBS Asia Future Forward Conference in Singapore, he pointed to both the cost of financing infrastructure and investors’ eventual demand for returns, according to Stocktwits, citing CNBC.

Intel CEO Lip-Bu Tan also raised concerns about borrowing costs and uncertain returns from AI infrastructure spending. The warnings were not about a lack of demand: CNBC reported that demand for computing infrastructure still exceeds supply. Instead, the executives identified financing as a potential obstacle to meeting that demand.

If there's any challenge in the front, it's capital and the cost of capital, and then the other part is in the longer run, people want to see the ROI

Hock Tan, Broadcom CEO, at the DBS Asia Future Forward Conference; quoted by Stocktwits citing CNBC

China’s memory progress meets a production reality check

A second pressure point was ChangXin Memory Technologies, or CXMT. The Chinese company announced progress over the weekend on a memory-chip architecture intended to pack more data into less space. Stocktwits identified it as a 4F2 memory-cell structure for DRAM and reported that CXMT plans a server-memory product using the technology by the end of 2026. That remains a planned introduction, not a product already in large-scale production.

Rayliant Global Advisors chief market strategist Phillip Wool called the advance a significant milestone for Chinese chipmakers. But he told CNBC the market reaction looked disproportionate to the immediate threat: CXMT has yet to demonstrate large-scale production and still trails Samsung and SK Hynix in market share. He also stressed that the reported advance was not in HBM, where Korean suppliers remain dominant.

UBP senior equity advisor Vey-Sern Ling offered another explanation for the selling: jittery investors looking for reasons to take profits in AI-related stocks that had outperformed this year, particularly memory shares. He said Chinese memory makers could eventually affect the supply-demand balance, but still face technology hurdles, especially in advanced memory. Wool likewise read the sell-off as evidence of vulnerable AI sentiment rather than a fundamental change in the competitive landscape.