European semiconductor names weakened on Tuesday in the aftermath of a steep selloff in South Korean chip stocks, despite an outsized earnings forecast from Samsung Electronics. The slide in Asian markets prompted investors to reassess near-term momentum in AI-related chip demand.
In Amsterdam ASML fell 4.2% by 07:42 GMT. STMicroelectronics and Infineon each declined by more than 4%. Other European suppliers moved lower as well: ASM International and BE Semiconductor lost over 3% apiece, while Soitec plunged as much as 10.4%, mirroring the larger falls recorded in Seoul.
The rout in South Korea was notable. Samsung shares fell roughly 7% after the company published its results and guidance, and SK Hynix dropped about 6%, driving the benchmark KOSPI index down nearly 5%.
What Samsung reported
Samsung said it expects second-quarter operating profit of 89.4 trillion won, a near 19-fold increase from the same period a year earlier and larger than its combined profit over the prior three years. That operating-profit projection exceeded an LSEG SmartEstimate of 87.3 trillion won. Samsung also forecast revenue rising 129% to 171 trillion won for the quarter.
The company’s headline figures include one-off charges related to employee bonus provisions. Earlier this year Samsung agreed to remove a 1,000% base-salary bonus cap and to allocate 10.5% of operating profit for bonuses, a change that followed weeks of labour union protests pressing for a larger share of company earnings.
Market reaction and analyst context
Despite the exceptional headline numbers, some market participants said the decline reflected expectations that were largely priced into shares ahead of the announcement, coupled with broader uncertainty over the length of the current AI-led spending cycle for chips. Albert Yong, managing partner at Petra Capital Management, noted that Samsung’s strong results had been anticipated and were reflected in the advance rally, and that investor focus remains on the sustainability of AI demand and the potential for slower infrastructure spending from major U.S. technology companies.
Supply-and-demand signals
The report also highlighted recent dynamics in memory pricing. Memory prices have risen markedly over the past year, a development that has fed questions about the durability of demand for memory products and the sustainability of the current profit levels across the sector.
Samsung is due to publish its full second-quarter results, including a divisional earnings breakdown, on July 30.
Key sectors affected
- Semiconductors and chip equipment suppliers - directly affected by the moves in listed chip stocks and equipment makers.
- Memory markets - influenced by recent price gains and the impact on supplier profits and inventory dynamics.
- Equity markets with exposure to AI-related hardware demand - as investor expectations about the durability of AI spending influence valuations.