The shares of SK Hynix fell more than 9% on the Seoul Stock Exchange this Thursday, leading a new round of losses among semiconductor manufacturers in Asia. The move follows the strong wave of selling recorded in the United States, as investors take profits and reassess expectations for companies driven by artificial intelligence.
The South Korean company's decline erased the gain of about 8% recorded in the previous session. Since its IPO in the United States last week, the company's shares have shown greater volatility amid changes in investor sentiment.
The pressure also hit other companies in the sector in South Korea. The shares of Samsung Electronics fell more than 7%, while Seoul Semiconductor lost more than 5%. Meanwhile, LG Innotek fell about 1%, and Samsung SDI closed the trading session with losses of more than 2%.
The negative move spread to other Asian markets. In Japan, chip equipment manufacturer Advantest posted a decline of more than 6%, the same variation seen in SoftBank Group. Tokyo Electron lost almost 7%, while Renesas Electronics fell about 4%.
The correction came after a session of sharp losses among chipmakers in the United States. Companies such as Micron Technology, Intel, Lam Research and AMD ended the day lower, reinforcing the global profit-taking move in the segment.
The losses came even after Dutch company ASML reported results above market expectations. The company raised, for the second time this year, its annual revenue forecast to a range between 43 billion and 45 billion euros. In addition, it announced plans to expand production of its extreme ultraviolet lithography machines, which are essential for manufacturing next-generation chips.
For Louis Kondratev, a trader at XFUNDs, the correction shows that the sector has reached a high level of concentration after months of gains driven by artificial intelligence.
"Semiconductors alone now represent about 20% of the S&P 500, which is incredibly difficult to sustain," he said.
The expert recalled that, during the dot-com bubble in 2000, the sector represented just over 8% of the index, while historically its share usually ranges between 2% and 5%.
Although corporate profits continue to grow at a consistent pace, Kondratev believes expectations may begin to be adjusted in light of high valuations.
"The pace of profit growth has been very strong, but it is concentrated mainly in the semiconductor sector, and that pace may begin to slow as valuations adjust," he said.