Full Breakdown
South Korean Chipmakers Announce Massive AI Investment as Shares Plunge in Global Tech Selloff
7/3/2026, 4:35:01 AM
Investment Announcements Amid Market Turbulence
South Korean semiconductor leaders disclosed a coordinated expansion plan targeting artificial-intelligence (AI) workloads. SK Hynix outlined an 80 trillion-won (? $51 billion) NAND flash fabrication plant (M17) slated for construction in Cheongju, with a complementary 20 trillion-won advanced-packaging facility to be completed by late 2027. The company also reaffirmed a broader 100 trillion-won (? $64 billion) domestic investment, including a phased AI data-center rollout beginning at 5 GW and eventually reaching 15 GW. Samsung Electronics, together with SK Hynix, is slated to receive a combined 800 trillion-won allocation under a government-backed semiconductor ecosystem project.
Market Reaction and Share Declines
The announcements coincided with a sharp selloff across global chip stocks. In early Thursday trading, Samsung Electronics fell more than 7 % (7.71 % in closing data, 5.41 % in pre-market quotes), while SK Hynix dropped over 9 % (9.34 % in closing data, 6.52 % pre-market). SK Square, SK Hynix’s largest shareholder, slid more than 10 % in one report and 5.92 % in another. The KOSPI index plunged 6.25 %, triggering a temporary circuit-breaker. U.S. peers such as Micron (-10 %), SanDisk (-10 %), AMD (-6.9 %), Intel (-9 %) and Nvidia (-1.3 %) also declined, reflecting a broader tech rout sparked by Meta Platforms’ entry into the cloud business.
Background & Context
The AI boom has driven demand for high-bandwidth memory (HBM), DRAM, and NAND storage, prompting South Korean firms to expand capacity. Meta’s surprise cloud-service launch raised concerns that hyperscalers might possess excess AI compute, feeding market anxiety about a potential supply glut. The South Korean government announced parallel AI-infrastructure investments, reinforcing the sector’s strategic importance.
Key Figures & Groups
- Kwak Noh-jung, CEO of SK Hynix.
- Samsung Electronics (no individual CEO named).
- SK Square, major SK Hynix shareholder.
- President Lee Jae Myung, South Korean head of state.
- Han Ji-young, analyst at Kiwoom Securities.
- Meta Platforms, U.S. social-media conglomerate.
Data & Statistics
- SK Hynix: 80 trillion won for M17 NAND fab; 20 trillion won for packaging.
- Combined Samsung-SK Hynix national project: 800 trillion won.
- Share price drops: Samsung -7.71 % (closing), SK Hynix -9.34 % (closing).
- KOSPI: -6.25 % (? 519 points).
- Korean won depreciation: 7.4 % YTD; 10-year Treasury yield 4.195 %.
- Foreign investors net-sold 3,174.2 billion won of local shares.
Official Statements & Responses
- “These investments are aimed at meeting the soaring demand for HBM servers and DRAM, as well as enterprise SSDs and NAND, as AI services take off,” Kwak Noh-jung said.
- “We plan to build AI data centers across the country in phases, starting with an initial capacity of 5 GW and eventually scaling up to 15 GW,” Kwak added.
Criticism & Opposition
Analyst Han Ji-young warned that “the market’s demands increase” as semiconductor stocks rise, noting past “noise” from AI-investment narratives such as the DeepSeek and Turbo Quant incidents. She also observed that “an actual slowdown in AI demand or in earnings has not materialized,” highlighting the tension between bullish investment plans and lingering demand uncertainty.
Conflicting Reports & Gaps
Sources differ on the magnitude of share declines: Samsung’s drop is reported as >7 % (source 1), 7.71 % (source 3), and 5.41 % pre-market (source 6). SK Hynix’s fall is listed as >9 % (source 1), 9.34 % (source 3), and 6.52 % pre-market (source 6). No definitive reconciliation is provided.
Verbatim Quotes
- “These investments are aimed at meeting the soaring demand for HBM servers and DRAM, as well as enterprise SSDs and NAND, as AI services take off,” — Kwak Noh-jung, CEO, SK Hynix
- “We plan to build AI data centers across the country in phases, starting with an initial capacity of 5 gigawatts (GW) and eventually scaling up to 15 GW,” — Kwak Noh-jung, CEO, SK Hynix
- “It is true that as the stock price of leading sectors rises, the market’s demands increase,” — Han Ji-young, Analyst, Kiwoom Securities
- “It is worth noting that an actual slowdown in AI demand or in earnings has not materialized.” — Han Ji-young, Analyst, Kiwoom Securities
What’s Next
SK Hynix will list American depositary receipts on the Nasdaq on July 10, expanding its investor base. The phased AI data-center construction and the broader 800 trillion-won national semiconductor program are slated to unfold over the coming years, while market participants monitor whether global AI demand sustains the aggressive capacity expansion.
