Samsung Electronics and SK Hynix experienced significant stock declines of 13.4% and 14.7% respectively on July 28, 2026, amidst growing concerns about competition from Chinese semiconductor manufacturers and AI infrastructure financing. This resulted in South Korea's KOSPI index dropping 10.8%, marking its largest one-day decline since early 2020. The selloff was fueled by reports of Chinese companies developing advanced lithography equipment, raising fears about increasing domestic production capabilities. Investors are watching closely for SK Hynix's upcoming earnings report, which may reflect the demand for high-bandwidth memory chips linked to AI advancements.

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Samsung and SK Hynix Plunge as China Chip Fears Intensify

Khac Phu Nguyen

Tue, July 28, 2026 at 1:06 PM EDT1 min read

This article first appeared on GuruFocus.

Samsung Electronics ( SSNLF), a major South Korean memory-chip producer, fell 13.4% on Tuesday, while SK Hynix ( HXSCL), a leading supplier of high-bandwidth memory chips used in AI systems, dropped 14.7%. Samsung recorded its worst one-day decline in almost two decades, while the combined selloff helped push South Korea's KOSPI index down 10.8%. The index recorded its largest daily decrease since the early period of the U.S.-Iran conflict in March.

Investors were assessing concerns about AI-infrastructure financing, semiconductor valuations and increasing competition from China. Reports that Chinese companies were developing domestic deep-ultraviolet lithography equipment renewed concerns that Chinese memory producers could expand capacity more rapidly. SK Hynix's U.S.-listed shares had also closed 7.5% lower at $143.02 on Monday, their first finish below the $149 listing price since the company's Nasdaq debut earlier in July.

SK Hynix supplies Nvidia ( NASDAQ:NVDA) with HBM chips, leaving its earnings particularly sensitive to expectations for AI spending and advanced-processor demand. The company is scheduled to report earnings on Wednesday, its first results since the Nasdaq listing. Financially, Samsung and SK Hynix together represent nearly half of the KOSPI, meaning their double-digit declines transmitted substantial pressure directly into the benchmark index. Investors may now examine whether SK Hynix's earnings support current HBM expectations and whether China's developing equipment can achieve the reliability, performance and commercial scale required to intensify competition.