The AI tailwind from the US failed to shield South Korean semiconductor stocks from a selloff. While US chip stocks including Nvidia rallied on Amazon’s massive capital expenditure outlook, South Korea’s Samsung Electronics and SK Hynix fell more than 4% on news that Chinese memory maker CXMT is pursuing aggressive capacity expansion.

As of 10 a.m. Monday on the Korea Exchange, Samsung Electronics (005930) was down 4.38% from the previous session, while SK Hynix (000660) tumbled 4.79%. The declines came after reports that CXMT is planning to build its second 12-inch DRAM fab in Beijing, stoking fears of a global memory oversupply.

Equipment and HBM-related stocks also fell in tandem: Hanmi Semiconductor (-3.11%), Wonik IPS (-2.77%), Yest (-3.23%), and LTC (-3.96%). By contrast, some materials and equipment names rose, including Dongjin Semichem (+3.09%), Soulbrain (+1.57%), EO Technics (+0.34%), and Leeno Industrial (+0.33%), showing a mixed picture across the sector.

US Chip Stocks Get a Boost from AWS Results

The US semiconductor market rallied on the Amazon catalyst. AWS revenue grew 37% year-over-year, and Amazon raised its 2025 capital expenditure outlook to $220 billion (approximately 312.7 trillion won), reinforcing expectations of sustained demand for AI data center chips.

The Philadelphia Semiconductor Index (SOX) closed at 11,430.35, up 1.05% from the prior session. Nvidia rose 2.93% to $206.64, AMD gained 1.78% to $484.64, and Micron advanced 0.79% to $829.50. Broadcom ($392.23, +0.76%), TSMC ADR ($406.11, +0.46%), and ASML ($1,642.52, +0.83%) also finished higher.

Notably, onsemi guided third-quarter revenue of $1.65 billion to $1.75 billion (approximately 2.35 trillion to 2.49 trillion won). The midpoint of $1.7 billion topped the market consensus of $1.67 billion. The company said it expects AI data center revenue to more than double by 2026.

Memory prices continued their upward trend. Spot prices for AI server-grade DDR5 16Gb (2Gx8) 4800/5600 rose 0.72%, while DDR4 16Gb (2Gx8) 3200 gained 0.57%. NAND flash spot and fixed prices both rose, led by SLC and MLC products. On a fixed-price basis for the second half of June, NAND 64Gb 8Gx8 MLC posted the largest gain at 11.48%.

CXMT Pushes Beijing Fab 2, Market Share Climbs to 8%

The drag on South Korean chip stocks came from China. According to industry sources, CXMT is considering building its second 12-inch DRAM fab in Beijing’s Yizhuang area and has requested at least 60 million yuan (approximately $8.9 million) in support from local government-affiliated development zones. Production capacity and total investment have not yet been finalized.

CXMT listed on Shanghai’s STAR Market on June 27, raising 57.92 billion yuan (approximately 8 trillion won), and has since moved aggressively to expand. On its debut day, the stock closed at 49 yuan, up 466% from its IPO price of 8.66 yuan, pushing its market capitalization to roughly 3.3 trillion yuan (approximately $488.4 billion) — overtaking ICBC to become the largest company on China’s mainland exchanges.

CXMT is also expanding its Hefei fab and building a new fab in Shanghai. Industry observers estimate the company’s monthly wafer output — currently around 240,000 wafers — could grow to 600,000 wafers per month by 2030. CXMT’s global DRAM market share has climbed rapidly from 3% in Q1 of last year to 8% in Q1 of this year.

Still, semiconductor industry experts say CXMT’s expansion will have limited near-term impact on Samsung Electronics and SK Hynix earnings. CXMT’s main process, G4, is roughly equivalent to the 1z-generation (10nm-class third-gen) node, lagging Samsung and SK Hynix’s leading processes (1b and 1c) by about 2-3 years. Due to US export controls, CXMT cannot import ASML’s EUV equipment and relies on DUV multi-patterning instead.

“Securing its own technology is a notable achievement, but it’s still close to the prototype testing stage, and matching ASML-level throughput will take several more years,” said Kim Hyung-joon, professor emeritus at Seoul National University and head of the Next-Generation Intelligent Semiconductor Project. Park Jae-keun, distinguished professor at Hanyang University’s School of Electronic Engineering, estimated it would take 3-4 years for Chinese-made equipment to reach ASML’s level.

Brokerages Cut Target Prices but Keep “Buy” Ratings

A wave of target price cuts from South Korean brokerages added further pressure on chip stocks. In July, for the first time this year, domestic brokerage downgrades of target prices outnumbered upgrades. NH, Samsung, Kiwoom, Shinhan, and Daishin Securities all lowered their SK Hynix targets, with some cutting sharply from around 4.2 million won to roughly 2.8 million won.

The revisions reflect recent share price declines, slowing earnings growth, and adjusted memory price forecasts — yet most brokerages maintained “Buy” ratings. The average target price across brokerages stands at 510,000 won for Samsung Electronics and 3.37 million won for SK Hynix, implying a potential upside of around 96% from current levels.

CategorySamsung ElectronicsSK HynixShare price change-4.38%-4.79%Brokerage average target price510,000 won3.37 million wonRating”Buy” maintained”Buy” maintained

Note: As of 10 a.m. Monday; average target prices based on most recent brokerage reports.

Separately, China will implement its revised “Regulations on the Protection of Integrated Circuit Layout Designs” starting October 15. The move is expected to strengthen intellectual property protections for semiconductor circuit layout designs, bolstering rights protection for China’s domestic chip design industry.

“China’s self-sufficiency push or CXMT’s mass production challenges won’t immediately threaten Samsung Electronics or SK Hynix’s position,” said an industry official. “But the faster China’s ecosystem matures, the more likely it is to leverage massive capital and scale for volume pressure — so long-term contingency planning is needed.”