The AI chip sell-off that dragged Nvidia lower on Monday has spread across time zones, triggering a circuit-breaker halt on South Korea’s Kospi index and sending Japanese and American chip stocks sharply lower as investors reassess the economics of the artificial intelligence spending boom.
Kospi halted as Samsung and SK Hynix slide
Trading on the Kospi was suspended for 20 minutes on Tuesday morning after the index dropped 8%, the circuit-breaker threshold. When trading resumed, losses deepened further to around 10%.
Samsung Electronics and SK Hynix led the decline, each falling roughly 12% in Seoul. The Kospi has now triggered its circuit breaker eight times this year. The index more than doubled from January to mid-June but has since surrendered around a third of those gains.
The Seoul sell-off comes with an uncomfortable backdrop for SK Hynix in particular. Its US-listed shares fell 7.5% on Monday, pushing them well below the $149 offer price from its Nasdaq debut on 9 July. That offering, involving 177,900,000 American depositary shares at $149.00 each, raised approximately $26.5 billion, according to Reuters, making it one of the largest US market debuts of the year. The deal was more than seven times oversubscribed, and SK Hynix’s ADSs jumped 14% on their first day. Giving back those gains this quickly will unsettle the retail-heavy investor base that has amplified volatility in Korean markets in recent months.
Japan’s Nikkei 225, also dominated by technology stocks, was almost 3.8% lower on Tuesday morning.
The AI chip sell-off traces back to Nvidia’s data-centre deal
Nvidia fell 5% in New York on Monday after the Wall Street Journal reported the company is in talks to contribute around $250 billion to a massive data-centre project for OpenAI. The BBC has contacted Nvidia and OpenAI for comment.
The decline was enough to cost Nvidia its position as the world’s most valuable listed company. Apple, which has risen roughly 25% this year, moved back to the top spot.
The reaction illustrates the anxiety now running through AI-exposed markets. Governments and companies have committed hundreds of billions of dollars to AI infrastructure, and a growing number of analysts are asking whether the technology can generate returns that justify that scale of investment. Competition from Chinese chipmakers adds another layer of pressure.
CXMT’s Shanghai debut tells a very different story
While the AI chip sell-off battered Western and Korean names, China’s ChangXin Memory Technologies (CXMT) staged one of the most dramatic stock market debuts in recent memory. Its shares surged 466% on their first day of trading on Shanghai’s STAR Market on 27 July, vaulting it past ICBC to become China’s most valuable listed company, according to Quartz. The snippet describing the gain as “nearly 470%” refers to the same session; the Quartz figure of 466% is used here as the more precisely reported number.
The IPO itself was a record. CXMT priced at 8.66 yuan per share, raising gross proceeds of approximately 57.9 billion yuan (around $8.5 billion) from the sale of nearly 6.7 billion shares, the South China Morning Post reports. That is nearly double the original fundraising target of 29.5 billion yuan and surpasses the 53.23 billion yuan raised by SMIC in its 2020 Shanghai listing, making it the largest A-share IPO by a Chinese chip company. If an over-allotment option is fully exercised, gross proceeds rise to approximately 66.6 billion yuan, Reuters reported.
CXMT is the world’s fourth-largest DRAM maker, with approximately 7.7% market share as of 2025, and manufactures dynamic random-access memory chips for AI data centres, mobile phones, PCs, and tablets. It is also on the US government’s entity blacklist, Yahoo Finance notes.
The financial turnaround underpinning all this is striking in its speed. CXMT has guided for first-half 2026 revenue of between 110 billion and 120 billion yuan, more than seven times the prior-year figure, with net profit of 66 billion to 75 billion yuan swinging from a loss a year earlier. First-quarter 2026 operating profit came in at 35.43 billion yuan, reversing a 2.83 billion yuan operating loss in the same period of 2025.
Morningstar analyst Jing Jie Yu told Reuters the IPO was priced at roughly one times his firm’s 2027 price-to-book estimate, a steep discount to the 2.1-to-2.3-times range commanded by international peers. He viewed the opening-day surge as overdone, citing the memory industry’s cyclical nature and ongoing US technology export restrictions.
That last point is the one to watch. CXMT’s debut shows there is Chinese domestic capital willing to bet heavily on homegrown AI infrastructure. If export controls tighten further, that bet gets more valuable, and the pressure on Nvidia’s market position intensifies. The next US policy move on chip exports may matter more to this sell-off than any single quarterly earnings report.
