Asia opened on its back foot. South Korean stocks resumed sliding, with the Kospi off as much as 3.2% at one point. Chip heavyweights Samsung Electronics Co. and SK Hynix Inc. each slipped more than 4% before recovering part of the drop.
Japan was not spared either. The tech-leaning Nikkei 225 fell about 2%, and chip-equipment maker Advantest Corp. ranked among the biggest losers.
Two stress points are hitting at once. In the US, semiconductor names notched an eighth straight day of declines on Friday as investors fretted over the soaring price tag of the AI buildout. Separately, China's DeepSeek rolled out an AI model update over the weekend that it says is faster and more efficient, heightening fears that future AI workloads could require less memory.
Speaking for Life Asset Management as its chief executive officer, Kang DaeKwun said, "There are too many uncertainties to call a bottom" for Korean stocks, pointing to concerns over whether funding for US companies' AI projects will continue as the main driver of market unease. "Korean companies cannot make money unless the US firms continue to spend."
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Context helps: the Kospi just logged its worst week since October 2008, even as the benchmark remains ahead by over 30% for the year, following ravenous AI spending that drove memory prices to record highs. That leaves chipmakers levered to two variables that now look wobbly - US AI funding appetites and how much memory next generation AI will really need.
The bottom line: earnings sensitivity to AI capex and memory demand is front and center. Watch whether US firms keep opening the checkbook, and whether "leaner" AI models dent the bull case for high-end memory pricing.
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