An 11% drop in the Kospi. SK Hynix down nearly 15%. Samsung’s worst single day in almost two decades. The trigger: reports that Nvidia is negotiating a $250 billion guarantee for OpenAI, a company with no investment-grade credit rating, to lease a 10-gigawatt data centre.
The AI chip stock rout deepened, when South Korea’s benchmark Kospi plunged as much as 11%, triggering the country’s eighth circuit breaker of the year and a 20-minute trading suspension. SK Hynix fell nearly 15% at close, while Samsung Electronics dropped more than 13% — its worst single-day decline in almost two decades. Together, the two firms account for nearly half of the Kospi’s total weight. Kioxia Holdings, Japan’s flash-memory maker, slumped more than 18%, while Taiwan’s MediaTek fell almost 10%. The sell-off spread through Wall Street overnight — Micron dropped over 5% in pre-market trading, with AMD and Intel both down more than 4%. Analysts pointed to a specific report as the immediate catalyst: Nvidia is reportedly negotiating a $250 billion guarantee to help OpenAI lease a 10-gigawatt data centre campus in Ohio — and OpenAI does not currently hold an investment-grade credit rating.
What’s Happening & Why It Matters
The Trigger: Nvidia-OpenAI Financing
The AI chip stock rout traces most to investor unease over a specific financing structure the Wall Street Journal first reported. Nvidia’s reported willingness to guarantee $250 billion in financing for OpenAI’s Ohio data centre lease raises a pointed question: why would the world’s most valuable chipmaker need to backstop debt for a company without an investment-grade credit rating, unless the underlying AI revenue case still depends on assumptions markets are no longer willing to accept without scrutiny. As TF covered in its AI stock sell-off article, this is not the first time in 2026 that Nvidia-adjacent financing arrangements have spooked investors already questioning whether hyperscaler AI spending will generate proportionate returns.
By contrast, the Kospi decline this week alone brings the index’s cumulative July decline close to 30% — a reversal than June’s comparable episode. Acadian Asset Management‘s Owen Lamont summarised the underlying anxiety: “We’re facing an incredible uncertainty,” pointing to how little visibility investors have into how AI technology will affect the economy.
China’s Chip Progress Adds Pressure
The AI chip stock rout carries a second contributing factor distinct from the Nvidia-OpenAI financing concern. Han Ji-young, an analyst at Kiwoom Securities, said reports that Chinese companies were developing domestic deep ultraviolet (DUV) lithography equipment reignited concerns that Chinese memory-chip makers could accelerate capacity expansion, intensifying competition in the global memory market. As TF covered in its CXMT stock debut article, China’s ChangXin Memory Technologies surged roughly 466% on its own Shanghai debut just one day earlier — a demonstration of Chinese domestic memory ambitions that arrived before this sell-off began.
That combination — Western AI financing anxiety and rising Chinese competitive capacity in the same week — creates a difficult narrative for investors holding SK Hynix and Samsung. Both companies are among the world’s largest suppliers of high-bandwidth memory (HBM) chips used in AI servers, making their shares sensitive to shifts in expectations for hyperscaler spending on the products Chinese rivals are racing to replicate.
SK Hynix Drops Below IPO Listing Price
The AI chip stock rout carries specific consequences for SK Hynix beyond its Seoul-listed shares. The company’s US shares closed 7.5% lower overnight at $143.02 — the first close below their $149 IPO price since the stock debuted on Nasdaq, in what was the second-largest US listing after SpaceX’s own record offering, which TF covered in detail. That reversal illustrates how sentiment can turn against one of 2026’s most watched memory-sector bets.
By contrast, SK Hynix CEO Kwak Noh-jung confirmed just weeks earlier the company plans to invest 100 trillion Korean won ($64.37 billion), including construction of its M17 fabrication plant targeting first-half 2029 operations — a long-term capital commitment that is unchanged regardless of short-term stock volatility. Nvidia shares themselves fell around 1.2% in the sell-off, allowing Apple to reclaim its position as the world’s most valuable company.
TF Summary: What’s Next
The Federal Reserve announces its July interest rate decision on 29 July, with elevated uncertainty surrounding the meeting given the current market volatility. Meta Platforms reports Q2 2026 earnings the same day, with investors following Alphabet’s own significant capital expenditure guidance revision. SK Hynix‘s domestic expansion plans, including the M17 fabrication facility, continue on their existing timeline independent of stock movement.
MY FORECAST: The AI chip stock rout will stabilise once Meta’s earnings and the Fed’s rate decision provide markets with concrete data points to replace the current speculation-driven volatility — sell-offs anchored in financing structure concerns rather than fundamental demand collapse recover faster than those presenting end-market weakness. By contrast, the Chinese competitive threat CXMT’s debut and the DUV lithography reports both signal will not resolve on any comparable timeline. Expect continued volatility in Samsung and SK Hynix shares as investors recalibrate how much of the current memory supercycle premium is durable competitive advantage versus temporary supply scarcity that Chinese manufacturers are working to close.
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