TheGlobal semiconductor stocks came under heavy selling pressure on Monday, led by a record one-day decline in SK Hynix shares, as investors reacted to escalating geopolitical tensions in the Middle East and growing concerns that artificial intelligence (AI)-related chip stocks have become overvalued.
‎The sell-off began in Asia, where shares of South Korean memory chipmaker SK Hynix plunged more than 15%, marking the largest single-day decline in the company’s history. The sharp fall came as investors locked in profits following a strong rally that culminated in the company’s Nasdaq debut last week.
‎‎Losses in SK Hynix, together with declines in rival Samsung Electronics, weighed heavily on South Korea’s benchmark Kospi index, which fell 9% and triggered a 20-minute trading halt.
‎The weakness quickly spread to Europe, with major semiconductor companies opening lower. Dutch chip equipment makers ASMI, ASML and Besi declined between 1% and 2%, while France’s STMicroelectronics fell about 1%. Germany’s Infineon Technologies also dropped roughly 2%.
‎‎The negative sentiment extended to the United States, where semiconductor stocks pointed to a weaker open in pre-market trading. Western Digital fell 6.5%, Micron Technology declined 5.4%, and SanDisk lost nearly 7%. Seagate Technology shed 5%, while Advanced Micro Devices (AMD) and Intel both traded close to 3% lower.
‎‎Monday’s retreat followed SK Hynix’s blockbuster listing on Nasdaq last week. The company, the world’s leading supplier of AI memory chips, raised more than $26 billion through the sale of American Depositary Receipts (ADRs) priced at $149 each, after its Seoul-listed shares had more than tripled in value this year.
‎The ADRs made a strong market debut, opening 14% above the offer price at $170 before ending their first trading session with a gain of 12.8%.
‎Despite continued optimism surrounding demand for AI memory chips, some analysts believe valuations have become stretched.
‎‎”The current memory upcycle is tracking substantially stronger than expected, but our base case continues to assume normalisation in cycle dynamics, limiting upside at current levels,” said Lorraine Tan, a director at Morningstar.
‎SK Hynix has experienced heightened share price volatility throughout the year as investors increasingly positioned for sustained earnings growth driven by tight supplies of high-bandwidth memory (HBM) chips, a key component used in AI data centres.
‎Market volatility has also been amplified by the widespread use of leveraged exchange-traded funds, which have intensified both upward and downward price movements in the stock.
‎The broad-based decline highlights growing investor caution as elevated AI-driven valuations collide with geopolitical uncertainty, prompting traders to reassess risk exposure across the global semiconductor sector.
