SK Hynix, Samsung Lead Asian Chip Stock Selloff After Sandisk, Western Digital Outlook

Shares of SK Hynix and Samsung Electronics tumbled on Thursday, leading a broad decline in Asian memory chip stocks after earnings guidance from Sandisk and Western Digital failed to meet investors' high expectations.

SK Hynix suffered the steepest losses in the sector, dropping nearly 9%, while Samsung Electronics fell around 6%. The sharp declines weighed heavily on South Korea's KOSPI, which slipped about 4% during the session.

The weakness followed overnight losses in U.S. memory-related stocks. Western Digital plunged more than 9% in after-hours trading after issuing a revenue forecast that was only slightly above Wall Street estimates. Although the company exceeded expectations, investors appeared disappointed given the strong rally in the stock, which has nearly tripled this year on optimism surrounding artificial intelligence (AI)-driven demand for memory products.

Meanwhile, Sandisk fell roughly 8% after its quarterly profit outlook came in below elevated market expectations. The results reignited concerns that valuations across the memory chip industry may have climbed too far amid the ongoing AI investment boom.

Investor caution toward AI-linked semiconductor stocks had already triggered a sharp correction in July before a modest recovery emerged in early August. However, the latest earnings updates suggest that momentum in the sector may be fading, prompting renewed selling pressure.

The downturn spread across Asian semiconductor markets. Chinese memory chip manufacturer CXMT declined nearly 4%, while Japan's Kioxia dropped about 8.5%.

Losses were not limited to memory chip companies. Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, slipped around 1.5% in Taiwan trading. In China, Semiconductor Manufacturing International Corp. (SMIC) also came under pressure, falling approximately 4.3%.

The latest market reaction highlights growing investor sensitivity to earnings guidance and valuation concerns, particularly among AI-related semiconductor stocks. As companies face increasingly high expectations, future earnings reports are likely to remain a key driver of sentiment across the global chip sector.