Chinese chip stocks plunge 15% as global tech selloff deepens

The Hang Seng Tech Index erased gains to fall 0.2% as Chinese semiconductor stocks plunged, tracking a global tech rout that wiped billions from chipmakers across Asia.

"The selloff in Asia tracks a dismal start to July for the Nasdaq as investors aggressively dumped chip stocks," said Zavier Wong, market analyst at eToro.

GigaDevice (兆易创新) tumbled more than 15%, Hua Hong Semiconductor (华虹宏力) fell over 13% and Semiconductor Manufacturing International Corp. (中芯国际, 0981.HK) declined over 11%. The declines mirrored a broader regional selloff that saw Samsung Electronics plunge 9.06% to 286,000 won and SK Hynix drop 14.57% to 2,187,000 won in Seoul. SK Square, the largest shareholder of SK Hynix, fell 13.2%.

The rout shows how deeply interconnected global semiconductor markets have become, with the Nasdaq's overnight slump cascading across Asia. Micron Technology dived more than 10% in Wednesday's session despite a 260% gain year-to-date, while Sandisk shed over 10%. Other mega-cap tech heavyweights including Nvidia and Broadcom fell between 1% and 2%.

The selloff extended across Hong Kong's semiconductor and AI names. Knowledge Atlas Technology, the Hong Kong-listed entity behind Chinese AI model developer Zhipu, plunged more than 17%, while Shanghai Iluvatar CoreX Semiconductor dropped nearly 18%. Samsung and SK Hynix now account for roughly half the Kospi's total weight, up from about a quarter at the end of last year, Wong noted, highlighting the heavyweights' outsized influence on South Korea's benchmark index. A sharp move in either name drags the whole index with it before the other roughly 900 listed companies get a say, he said.

Despite the selloff, SK Hynix Chief Executive Officer Kwak Noh-jung said Thursday the company plans to invest 100 trillion won ($64.37 billion) in South Korea, with construction of its M17 fabrication plant set to begin next year and operations targeted for the first half of 2029. The investment is aimed at meeting soaring demand for high-bandwidth memory servers and DRAM as AI services take off, Kwak said during a briefing in Asan, south of Seoul. Under the plan, the chipmaker will allocate 80 trillion won to its M17 chip manufacturing plant and 20 trillion won to the P&T7 facility for advanced chip assembly technology.

The announcement came just days after the South Korean government unveiled major investment initiatives to support the country's AI ambitions, including plans for Samsung Electronics and SK Hynix to invest a combined 800 trillion won as part of a national semiconductor ecosystem project. SK Hynix is also set to begin trading American depositary receipts on the Nasdaq on July 10, expanding access for US investors.

This article is for informational purposes only and does not constitute investment advice.