Global chip selloff accelerates on China competition and AI capex doubts; SK Hynix down 14.7%, Samsung off 13.4%

Semiconductor stocks plunged globally on July 28 as investor concerns over sustainability of the AI spending boom collided with reports of China's advancing chipmaking capabilities. South Korea's Nasdaq-listed SK Hynix fell 14.7% and Samsung Electronics dropped 13.4%—the latter its worst one-day performance in nearly two decades—with the KOSPI index closing down 10.8%. Micron, NVIDIA, Intel, and AMD all sank in the US, extending Monday's decline across memory, design, and foundry names.

The rout reflected dual pressures: media reports that Chinese companies are manufacturing immersion deep ultraviolet (DUV) lithography equipment—a domain where Dutch firm ASML has held dominance—triggered concern that Chinese memory-chip makers could accelerate capacity expansion and intensify competition in the global memory market. Concurrently, investor caution around valuations and AI infrastructure financing uncertainty weighed on sentiment. Brokers also circulated reports projecting memory prices could peak in 2027, dulling investor appetite for the sector.

Architects monitoring semiconductor supply chains should track this correction as a potential reset of capex expectations around memory and compute. While large-cap tech earnings this week and the Fed's rate decision will provide fresh signals on hyperscaler spending, the selloff underscores how sensitive chip equities remain to shifts in AI narratives and geopolitical supply-chain risk.