Asian memory and broader chip stocks retreated sharply on Thursday, led by heavy losses in SK Hynix and Samsung Electronics after U.S. after-hours results from Sandisk and Western Digital failed to meet market hopes.
SK Hynix emerged as the sector's weakest performer, plunging nearly 9%, while Samsung Electronics slid roughly 6%. The moves in the two Korean giants contributed to a roughly 4% decline in South Korea's KOSPI index.
Investors reacted to the overnight U.S. prints from two major memory-focused vendors. Western Digital dropped more than 9% in after-market trading after offering a revenue outlook that, while slightly ahead of consensus, did not satisfy investor expectations. That stock has already risen markedly this year, having tripled amid elevated optimism about memory demand driven by artificial intelligence.
Sandisk fell about 8% in after-hours trade after issuing a profit forecast for the current quarter that came in below some of the higher expectations held by the market. Together, the two U.S. results prompted renewed skepticism about extremely high valuations across memory and tech names associated with the AI trade.
Those valuation concerns had previously driven severe losses across the sector in July and only allowed for a tentative rebound in early August. The latest set of earnings and guidance now appears to have stopped that nascent recovery in its tracks.
The declines were widespread across Asian chipmakers. Chinese memory chip company CXMT slid nearly 4%, while Japan’s Kioxia fell about 8.5%. Semiconductor Foundry Asia also saw losses beyond memory names - Taiwan Semiconductor Manufacturing Company posted a 1.5% drop in Taiwan trade, while SMIC, China’s largest contract chipmaker, slid 4.3%.
Market context and flow
The immediate catalyst for the moves was the pair of after-hours U.S. releases. Western Digital’s slightly above-consensus revenue outlook and Sandisk’s softer profit guidance contrasted with the market’s elevated expectations, producing sharp after-market declines that transmitted to Asian trading the following day.
Across the sector, losses included a mix of memory specialists and larger foundries, underlining the breadth of the selloff.
Notable moves reported in session
- Western Digital - slid over 9% in after-hours trading.
- Sandisk - tumbled about 8% after-hours on a softer profit forecast for the quarter.
- SK Hynix - down nearly 9% during Asian trading.
- Samsung Electronics - fell about 6%.
- CXMT - down nearly 4%.
- Kioxia - slid about 8.5%.
- TSMC - fell 1.5% in Taiwan trade.
- SMIC - slid 4.3%.
Following the latest earnings-related weakness, the previously fragile recovery in chipmaking stocks appeared to have stalled, with investors reassessing valuations for memory and related technology companies that had been buoyed by hopes of AI-driven demand.