South Korea's two memory chip giants, Samsung Electronics and SK hynix, logged their steepest weekly share declines since the 2008 global financial crisis, as record foreign selling compounded worries over US interest rates, a possible AI investment bubble and intensifying competition from Chinese memory producers.

Korea Exchange data show Samsung Electronics shares plunging 17.8 percent between Monday and Friday, sliding from 262,000 won to 215,500 won ($195 to $160). It was the stock's sharpest weekly loss since the fourth week of October 2008, when it dropped 19.3 percent during the global financial crisis.

SK hynix fell harder, tumbling 24.3 percent from 1.681 million won to 1.272 million won — its steepest weekly decline since the third week of November 2008, when the stock sank 31.9 percent.

Foreign investors drove the rout, unloading a net 11.21 trillion won of Kospi-listed shares over the week. Samsung Electronics accounted for 3.47 trillion won of the net selling and SK hynix for 5.35 trillion won, together representing 78.8 percent of total net foreign sales. Foreign flows and ownership levels are tracked daily by the Korea Exchange, and offshore investors rank among the largest holders of Korean equities, making their moves a closely watched gauge of global sentiment toward the market.

The pullback dragged foreign ownership of Samsung Electronics down to 45.98 percent as of Friday, its lowest level since July 2009, while foreign holdings of SK hynix slipped to 48.85 percent, a level last seen in December 2021.

Both chipmakers have posted robust earnings, but investors focused on mounting external headwinds: uncertainty over US interest rates, doubts about the returns on massive AI investments and growing competition from China. The stakes extend well beyond the two tickers: Samsung and SK hynix rank among the world's largest memory producers, supplying the DRAM and NAND chips that underpin smartphones, PCs and AI data centers, and semiconductors are South Korea's largest export item. SK hynix in particular has built a leading position in high-bandwidth memory (HBM), the stacked-chip format used in AI accelerators, giving it heavy exposure to the very data center buildout whose returns are now being questioned.

Those worries deepened after ChangXin Memory Technologies (CXMT), China's largest DRAM maker, recently announced plans to roll out next-generation server memory based on a denser 4F-squared cell architecture by the end of 2026, signaling its ambition to challenge Korean chipmakers in advanced memory. The plan raises questions about the long-term competitive position of Samsung and SK hynix, though CXMT has yet to show that the technology can be mass-produced economically and has not disclosed detailed product specifications or manufacturing yields. Whether those disclosures arrive on schedule — and what they reveal about costs and yields — stands as one of the clearer markers for how seriously the challenge materializes.

SK hynix also faces uncertainty over a potential US listing of Solidigm, its NAND flash subsidiary, amid concerns that a separate listing could weigh on the parent company's valuation. Any formal step toward such a listing, alongside the weekly foreign flow data, would offer investors further reference points on how these pressures evolve.

"The concerns are unlikely to ease in the short term amid an unfavorable macroeconomic environment. Heightened market volatility could persist for some time," said Park Jae-hwan, an analyst at Eugene Investment & Securities.

Source: Korea Herald