South Korean Chip Stocks' Plunge Sends Shockwaves Through Cryptocurrency Market
South Korean chip stocks' downturn is sending shockwaves through the cryptocurrency market, particularly Bitcoin. On July 28, Samsung Electronics and SK Hynix shares plummeted more than 10% in Seoul markets, dragging the KOSPI index to a three-month low. The sharp drop has analysts warning of worsening sentiment across risk assets.
The correlation between Bitcoin and AI-related tech stocks is growing stronger, with Bitcoin moving in tandem with high-bandwidth memory (HBM) suppliers like Samsung Electronics and SK Hynix. These companies are critical components in the memory chip supply chain, essential for building AI data centers.
SK Hynix recently reported record second-quarter results, but its share price continued to decline, down 14% before earnings and another 41% over the past month. Analysts see this as a sign that investors are more concerned about future growth and a slowdown in AI investment than current performance.
Nvidia's planned $250 billion Ohio AI data center project has sparked debate about overheating investment, with JPMorgan's Joshua Meyers saying 'none of these seems to be fundamentally explained.'