Samsung Electronics, SK Hynix Slide 8%-10% as Nvidia Fears Hit Chip Stocks

CXMT listing adds to Nvidia-driven investment concerns

Samsung falls 8%; SK Hynix drops nearly 10%

Samsung Electronics and SK Hynix tumbled in early trading on July 28 as fresh negative cues from the US battered semiconductor shares. Investor sentiment toward the sector cooled quickly as concerns about artificial-intelligence spending tied to Nvidia coincided with the listing of Chinese memory maker CXMT.

As of 9:07 a.m., Samsung Electronics was trading at 233,500 won, down 8.07% from the previous session. SK Hynix fell 9.64% to 1.641 million won. Samsung Electronics preferred shares dropped 5.45% to 170,000 won, while SK Square slid 8.76% to 1 million won.

The selloff followed weakness in leading semiconductor stocks on Wall Street overnight. Sentiment toward the sector deteriorated after news that a Chinese company had developed deep-ultraviolet, or DUV, lithography equipment and controversy surrounding Nvidia's circular investment practices. Nvidia fell 5.0%, ASML dropped 5.8%, Micron Technology lost 2.3% and Sandisk slid 11.0%.

CXMT's listing on China's STAR Market a day earlier also hurt sentiment toward South Korean chip stocks, with its shares surging more than 465%.

Han Ji-young, an analyst at Kiwoom Securities, said concerns about capacity expansion by Chinese memory makers were increasing short-term volatility in semiconductor stocks. The sharp jump in CXMT shares could prompt global capital to increase exposure to the Chinese company, weakening relative demand for South Korean chip stocks, he added.

Kyung-ju Kang, Hankyung.com reporter, qurasoha@hankyung.com