In the span of a single day on the 28th, chip stocks across Asia, Europe, and the U.S. collapsed together. The trigger was news that China had begun mass-producing its own deep ultraviolet (DUV) lithography equipment. On top of that came fears that memory prices had peaked and renewed skepticism over whether AI investment actually pays off. The KOSPI closed down 10.84% at 6,023.66, breaking below the 6,000 line intraday, while Samsung Electronics and SK hynix each plunged 13–14%. The wave carried straight into European and U.S. chip stocks. And today, the earnings from SK hynix and from Microsoft and Meta face the first test of whether that fear was overdone. 📉

TL;DR

  • China’s DUV lithography mass-production news + memory-peak worries + AI-investment skepticism combined to drag chip stocks down across Asia → Europe → the U.S. on the 28th.
  • The KOSPI closed down 10.84% at 6,023.66 (a circuit breaker was triggered), Samsung -13.39% and SK hynix -14.65%, with foreigners net-selling more than 4 trillion won in a single day.
  • Broadcom and Palantir, which carry lighter capex burdens, held their ground alone; today’s SK hynix (9 a.m.) and Microsoft·Meta earnings become the pivot in the “AI bubble vs. supercycle” debate.

🇨🇳 The Trigger Was “China’s Lithography Tools”

The trigger for this sell-off was news of China’s push for self-sufficiency in chip equipment. At its core is word that a Chinese company had begun producing its own deep ultraviolet (DUV) lithography tools. DUV is the key lithography equipment one generation behind the extreme ultraviolet (EUV) systems effectively monopolized by the Netherlands’ ASML.

What alarmed the market is that this is not merely a question of a single piece of equipment. If China can build lithography tools on its own, its self-sufficiency in chip manufacturing equipment rises, and the bottleneck that has held back capacity expansion at Chinese memory makers could ease. That led to concern that a flood of Chinese memory supply could soon drag prices down.

A symbolic scene overlapped as well: word that Changxin Memory Technologies (CXMT), China’s flagship memory firm, had surged more than 460% on its first day of trading on the Shanghai exchange. It was read as a sign of just how hot market expectations are for China’s semiconductor rise — and, conversely, as a catch-up threat to Korean and U.S. memory makers.

🇰🇷 KOSPI -10.84%, Circuit Breaker Triggered — “Sam-Hynix” Dragged the Index Down

Korea’s market was shaken the hardest. On the 28th the KOSPI closed down 732.09 points (10.84%) at 6,023.66. It broke below the 6,000 line intraday, and both the KOSPI and KOSDAQ triggered circuit breakers that briefly halt trading — a near-panic session. The KOSDAQ also finished down 59.01 points (7.72%) at 705.85.

The main culprits dragging the index down were the two big chip names collectively nicknamed “Sam-Hynix.” Samsung Electronics closed down 13.39% at 220,000 won and SK hynix plunged 14.65% to 1.55 million won, giving back much of their gains from the past three months. Foreigners net-sold more than 4 trillion won in the KOSPI market in a single day, selling roughly 3.209 trillion won of SK hynix and 1.634 trillion won of Samsung Electronics and deepening the drop.

Notably, it was not that earnings had deteriorated. One market analysis noted that “earnings are unchanged, yet the stock prices collapsed,” diagnosing that the new uncertainty of China’s technological catch-up had inflated the “risk premium” layered onto chip stocks. This drop was closer to a move to recompute the industry’s future than a reaction to any individual company’s report card.

🌏 It Spread from Asia to Europe to the U.S. in a Single Day

The selling did not stop in Korea but spread to chip stocks worldwide. The AI-linked selling that began in Asian markets swept through Europe to the U.S. within a day.

In Asia, Japan’s Nikkei 225 fell more than 4%, and memory maker Kioxia plunged more than 18% intraday. Chip equipment names Tokyo Electron (-10.96%) and Advantest (in the -10% range) were shaken hard, and SoftBank Group, which holds a stake in ARM, fell 4.43%. Taiwan’s TSMC dropped about 3%, while China’s ChiNext 300 index and Hong Kong’s Hang Seng China Semiconductor index tumbled in the 6% and 7% ranges, respectively.

New York’s markets also opened weak on the 28th (local time), led by chip stocks. On an early-session basis, Nvidia fell about 1%, while AMD dropped 8% and Intel 6%; memory maker Micron fell 10%, NAND-family SanDisk 17%, and Seagate and Western Digital each around 14%. That said, these figures are early- to mid-session levels and may differ from the final close, so the exact closing declines need to be confirmed. In Europe, ASML extended its weakness in the wake of reports on China’s DUV development, and ASM International and BE Semiconductor slipped 2–3% early on.

⚖️ Those Who “Sell” Chips Fell; Those Who “Use” Them Held

A hallmark of this session was that fortunes diverged even within the same chip·AI theme. Broadly, the “chip sellers” who must shoulder enormous capex collapsed, while the “chip users” who take that infrastructure and turn it into earnings fared relatively well.

A prime example: Broadcom closed up 0.34% at $383.22, holding its ground alone in a weak chip market. Leaning on demand for custom AI chips, it offered third-quarter AI revenue guidance of $16 billion, and its relatively light capex burden earned it a reputation as a “beneficiary of expanded investment.” Palantir, classified as an AI software·analytics firm, also closed up 7.00% at $131.53, a standout gain within a session of declines.

That gap captures the market’s dilemma. The flow of Big Tech pouring astronomical sums into AI continues, but as doubts grow over the time and certainty required for that money to return as actual profit, the equipment and memory makers who bear the investment burden directly were hit first.

🔎 Why Now — the “AI Bubble” Debate and Memory-Peak Worries

Behind this lies the “AI bubble or supercycle” debate that has rattled markets for weeks. This drop has the character of that anxiety meeting a China-driven shock and bursting all at once.

Owen Lamont, senior vice president at Acadian Asset Management, told CNBC, “The market right now faces enormous uncertainty,” adding, “No one is certain what impact AI will have on the economy. Volatility is likely to continue for a while.” He cited SK hynix’s sharp swings as a prime example of the market’s uncertainty over the AI investment cycle, and pointed to leveraged ETFs in Korea, Hong Kong, and the U.S. as factors amplifying volatility.

Sundeep Gantori, equity CIO at Standard Chartered, diagnosed that recent news of China’s advances in memory chips and lithography equipment had dampened sentiment. He also saw peak-price forecasts for memory from some brokerages as adding to the decline in Korean chip stocks. The concern is that even if demand for high-bandwidth memory (HBM) used in AI servers is solid now, the pace of earnings improvement could slow once prices pass their peak.

📅 Today Is the First Test — SK hynix·MS·Meta Earnings

Whether the fear was overdone is, in the end, a question earnings will answer — and the first answer comes today. SK hynix announces its second-quarter results at 9 a.m. on the 29th, followed by a Q&A. The market is watching the company’s read on second-half memory demand and price trends as closely as the actual figures. (Specific profit estimates circulating in brokerage circles vary widely by source and are not sufficiently verified, so this article reports only the announcement schedule as fact and offers no numeric forecast.)

That same night (local time, the 29th), Microsoft and Meta are due to report. For both, attention focuses less on the earnings themselves than on their AI capital-expenditure (capex) plans and the outlook for recouping it. With Alphabet having earlier lit this debate by signaling a major investment expansion, the capex guidance from these Big Tech reports is expected to serve as a gauge of how the market answers the question, “Is it worth continuing to pour money into AI?”

Overall Take

The 28th’s session showed just how thin the ice is beneath the “AI supercycle” narrative. That the KOSPI fell more than 10% and even triggered a circuit breaker without any deterioration in earnings can be read as a signal that the market has begun to recompute the “future value” of the chip·AI industry. The trigger — China’s self-sufficiency in lithography tools — is more than a short-term catalyst; it is a variable that could reshape the memory supply structure and the terrain of technological competition over the long run, and it warrants continued watching.

Still, it is too early to declare a single day’s plunge a trend reversal. That some names like Broadcom and Palantir held up shows the market has begun to distinguish not “AI as a whole” but “who makes money within AI.” Three points bear watching ahead: the read on second-half memory demand and prices SK hynix offers in today’s earnings commentary; the AI capex guidance Microsoft and Meta deliver tonight; and the speed at which China’s catch-up in equipment and memory technology translates into actual mass production and yields. These three will determine whether this fear stays a “correction” or extends into a longer phase.

※ This article is for informational purposes only and is not investment advice.

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