SK Hynix Shares Drop 11% as Inflation and AI Funding Worries Hit Chips

SK Hynix Inc. shares fell 11.42% to KRW 1,257,000 in Seoul, deepening a global chip selloff driven by hotter U.S. inflation, Federal Reserve rate expectations, and doubts over funding for artificial intelligence infrastructure.

The decline extended losses across Asian markets on Thursday. South Korea's KOSPI index dropped 7.81% to 5,539.34, while Samsung Electronics shares slid 8.84% to KRW 211,500. In Japan, the Nikkei 225 index fell 4.12% to 64,951.15, with SoftBank Group Corp shares losing 9.34%. These moves followed a Wednesday session on Wall Street where the tech-heavy Nasdaq Composite declined 1.88% to 26,692.87 and the S&P 500 slipped 1.11% to 7,718.94.

The pressure on semiconductor stocks reflects broader macroeconomic concerns. The Bureau of Labor Statistics reported that U.S. consumer prices rose 3.7% year over year in September, up from 3.4% in August. The Federal Reserve raised rates to a range of 3.75% to 4% on Sept. 16, with one more hike expected this year. Rising borrowing costs have become a central theme for technology leaders discussing the viability of current capital expenditures.

Broadcom Inc. CEO Hock Tan stated at a conference in Singapore that access to capital could become a bigger obstacle for AI development than chip or power shortages. Similarly, Intel Corp. CEO Lip-Bu Tan highlighted rising financing costs and uncertainty over investment returns. Goldman Sachs Group Inc. CEO David Solomon warned that not every data center project will win financing on favorable terms, noting that the 10-year Treasury yield has risen about 75 basis points since early July.

These funding concerns have weighed on the iShares Semiconductor ETF (SOXX), which has lost money in each of the past seven sessions despite gaining more than 70% this year. SK Hynix's Nasdaq-listed ADRs closed 6.06% lower on Wednesday at $147.55 and fell a further 3.96% to $141.71 in extended trading.

While market sentiment has turned cautious, some analysts view the recent volatility differently. Tech analyst Dan Ives told CNBC that the pullback represents a buying opportunity and that the AI boom is still in its early stages. According to Benzinga Edge data, the SK Hynix ADR ranks in the 98th percentile for momentum and the 58th percentile for value.