Full Breakdown
Global AI Chip Stocks Plunge Amid AI-Spending Concerns and Chinese Competition
7/28/2026, 8:06:05 PM
The July 28 Sell-off
On Tuesday, July 28, 2026, equity markets worldwide saw a sharp retreat in semiconductor and AI-related shares. South Korea’s Kospi fell 10.8%, its steepest one-day drop since early-2023 U.S.–Iran tensions. Samsung Electronics slid roughly 13% and SK Hynix lost about 15%, sending its U.S.–listed price below the $149 IPO level to $143.02. In Japan, Kioxia fell 18%, and trading halts were triggered in Seoul.
In the United States, the Nasdaq-100 briefly entered correction territory. Leading chip makers Sandisk, Western Digital, Seagate, Micron and AMD each dropped around 10% in early trade; Dell fell 13% and Intel slipped 7%. The sell-off followed a report that a Chinese state-backed firm had begun mass production of deep-ultraviolet (DUV) lithography tools, raising fears of pressure on ASML, Canon and Nikon.
Background & Context
The rally that began in early 2024 was driven by expectations that AI workloads would sustain demand for high-bandwidth memory and custom GPUs. Companies such as Amazon, Microsoft, Meta and Alphabet have pledged “hundreds of billions” in AI-related capital expenditures, a figure JPMorgan’s Fabio Bassi estimates at about $750 billion.
Converging concerns in late July included:
- Chinese competition – The debut of China’s memory-chip maker CXMT, whose shares jumped 466% on its Shanghai IPO.
- Financing strain – Many AI data-center projects rely on leveraged exchange-traded products and “circular funding,” heightening sensitivity to investor sentiment.
- Equipment-tool uncertainty – The unverified DUV tool report sparked worries that global equipment leaders could lose market share.
Data & Statistics
Official Statements & Responses
JPMorgan’s Fabio Bassi emphasized that the “hyper-scalers” (Amazon, Meta, Microsoft, Alphabet) dominate AI-related spending, accounting for roughly $750 bn of the projected $870 bn total.
HSBC analyst Max Kettner said, “nothing seems to shake this market,” reflecting earnings resilience across the broader equity universe.
On-the-Ground Reports
Asian exchanges opened with steep declines; the Kospi’s plunge triggered temporary trading halts in Seoul. Hong Kong’s Hang Seng held near 25,196, while Tokyo’s Nikkei fell 4.3% to 62,127.57. U.S. futures edged lower, but the S&P 500 rose 0.3% in the afternoon, masking sector-specific turbulence.
Conflicting Reports & Gaps
Sources differ on Samsung’s exact decline (13.1% vs. 13.4%) and on the timing of the Chinese DUV tool report, which remains unnamed and unverified. No firm details have been released about the performance or rollout schedule of the alleged Chinese equipment.
Verbatim Quotes
- “Nothing seems to shake this market,” — Max Kettner, HSBC
- “We believe the market was likely spooked by the progress of China’s chip-making equipment capabilities, and was worried that this progress would threaten the competitive position of global chip making and chip equipment leaders,” — Jing Jie Yu, equity analyst
What’s Next
- Earnings season – Meta and Microsoft report Wednesday; Amazon follows Thursday.
- SK Hynix results – Quarterly earnings due Wednesday.
- China’s tool rollout – Further confirmation could allay or intensify concerns about competitive pressure on global equipment makers.
