US semiconductor stocks fell on Tuesday, following weak trends in Asia and Europe. NVIDIA slipped about 1%, Intel plunged 8%, and Advanced Micro Devices dropped 10%. Memory chip maker Micron Technology declined 11%, SanDisk fell 17%, while Seagate Technology PLC and Western Digital each dropped around 14%.
This movement followed a massive sell-off in Asian markets. In South Korea, SK Hynix closed down 14.65%, and Samsung Electronics fell over 13%. Other AI-related stocks also saw heavy selling, with Samsung SDI dropping 11.37%, LG Innotek falling 16.29%, Seoul Semiconductor declining 8.78%, and LG Chem closing 7.5% lower.
Japanese chip stocks also declined. Tokyo Electron closed down 10.96%, Advantest fell over 10%, while SoftBank Group—a major AI investment proxy through its stake in Arm—dropped 4.43%. Japanese computer memory manufacturer Kioxia saw its stock plunge over 18%.
The selling pressure spread to Europe, with major chip companies declining in early trading. ASML Holding NV shares moved lower, after already falling over 8% on Monday. Other chip stocks, including ASM International and BE Semiconductor, saw early declines of between 2% and 3%.
This sell-off followed another weak day for US semiconductor stocks on Monday. The VanEck Semiconductor ETF (SMH) fell over 2%, adding to Friday's losses. Advanced Micro Devices and Teradyne dropped 5% and 4%, respectively. Micron Technology declined about 2%.
This weakness highlights the tight interlinkage between Asian tech stocks and the US AI trade theme. Samsung Electronics and SK Hynix are among the world's largest suppliers of high-bandwidth memory chips used in AI servers, making them particularly sensitive to changes in spending expectations from US-based hyperscalers.
Owen Lamont, Senior Vice President at Acadian Asset Management, said the sharp volatility in SK Hynix shares underscores the uncertainty surrounding the AI investment cycle. He believes investors still lack visibility on how this technology will ultimately impact the economy. "We are now facing tremendous uncertainty," he said. "No one knows how this AI process will affect our economy, so I think the market will be volatile regardless of what happens." Lamont added that leveraged exchange-traded products could amplify market volatility, even if they are not the sole cause of SK Hynix's recent fluctuations. "More broadly, the entire leveraged ETF ecosystem in South Korea and the US could increase volatility and magnify market swings."
Sandeep Gantori, Chief Investment Officer for equities at Standard Chartered Bank, said the long-term outlook remains solid: "The market opportunity is still large enough for multiple companies to benefit and coexist," and the AI investment cycle will continue to support leading tech companies. "Another reason for the weakness in South Korea today is that some brokerage reports indicate memory prices will peak in 2027, which is not far from our view," Gantori said. While Standard Chartered expects memory prices to peak next year, he added, "what's important is the risk-reward profile, which has improved at current valuation levels."
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