Chip Stocks Slide on U.S. Data Center Concerns

Samsung Electronics and SK Hynix shares plunged early on the 5th amid concern that rules on AI data center construction could tighten after Democrats took control of both chambers of the U.S. Congress in the midterm elections. At 9:12 a.m. in Seoul, Samsung Electronics traded at 211,000 won, down 3.21% from the previous session, and SK Hynix traded at 1.312 million won, down 6.02%.

All three major U.S. stock indexes rose overnight, but semiconductor shares weakened. The Dow Jones Industrial Average gained 3.03%, the S&P 500 rose 1.58%, and the Nasdaq Composite advanced 1.44%, while the Philadelphia Semiconductor Index fell 3.13%. The report said the Democrats’ control of Congress eased political uncertainty and strengthened expectations that the Iran war would end early, while concerns about tighter AI data center rules also came to the fore.

The report said local ballot measures held alongside the midterms on data center construction drew overwhelming opposition to development or calls for a pause. On concerns that memory demand growth could slow, Nvidia fell 3.17%, Broadcom 2.00%, Micron 7.00%, SK Hynix’s U.S. depositary receipts (ADRs) 5.12%, and SanDisk 7.91%. By contrast, Amazon rose 6.12%, Microsoft 6.68%, Alphabet 3.18%, and Meta 1.44%. The gains among major tech companies coincided with reduced concern about overinvestment from a spending race and expectations that existing AI infrastructure would become more valuable.

Some market participants argued that investment in AI equipment may not have peaked, saying companies could redirect investment to other regions if U.S. data center construction is delayed. At the time, foreign investors were net sellers of 227.8 billion won worth of shares on the KOSPI, while individuals and institutions were net buyers of 144 billion won and 78.9 billion won, respectively. In the KOSPI electrical and electronics sector, foreign investors’ net selling totaled 271.4 billion won; individuals and institutions were net buyers of 235.8 billion won and 28.7 billion won, respectively.

The report described intraday share-price movements at the time of publication. Foreign investors also sold more than individuals and institutions bought in the electrical and electronics sector, which includes Samsung Electronics and SK Hynix. The report did not provide nationwide ballot results or say that tighter rules had been finalized; it described regulatory tightening as a market concern.

Samsung Electronics and SK Hynix shares plunged early on the 5th amid concern that rules on AI data center construction could tighten after Democrats took control of both chambers of the U.S. Congress in the midterm elections. At 9:12 a.m. in Seoul, Samsung Electronics traded at 211,000 won, down 3.21% from the previous session, and SK Hynix traded at 1.312 million won, down 6.02%.

All three major U.S. stock indexes rose overnight, but semiconductor shares weakened. The Dow Jones Industrial Average gained 3.03%, the S&P 500 rose 1.58%, and the Nasdaq Composite advanced 1.44%, while the Philadelphia Semiconductor Index fell 3.13%. The report said the Democrats’ control of Congress eased political uncertainty and strengthened expectations that the Iran war would end early, while concerns about tighter AI data center rules also came to the fore.

The report said local ballot measures held alongside the midterms on data center construction drew overwhelming opposition to development or calls for a pause. On concerns that memory demand growth could slow, Nvidia fell 3.17%, Broadcom 2.00%, Micron 7.00%, SK Hynix’s U.S. depositary receipts (ADRs) 5.12%, and SanDisk 7.91%. By contrast, Amazon rose 6.12%, Microsoft 6.68%, Alphabet 3.18%, and Meta 1.44%. The gains among major tech companies coincided with reduced concern about overinvestment from a spending race and expectations that existing AI infrastructure would become more valuable.

Some market participants argued that investment in AI equipment may not have peaked, saying companies could redirect investment to other regions if U.S. data center construction is delayed. At the time, foreign investors were net sellers of 227.8 billion won worth of shares on the KOSPI, while individuals and institutions were net buyers of 144 billion won and 78.9 billion won, respectively. In the KOSPI electrical and electronics sector, foreign investors’ net selling totaled 271.4 billion won; individuals and institutions were net buyers of 235.8 billion won and 28.7 billion won, respectively.

The report described intraday share-price movements at the time of publication. Foreign investors also sold more than individuals and institutions bought in the electrical and electronics sector, which includes Samsung Electronics and SK Hynix. The report did not provide nationwide ballot results or say that tighter rules had been finalized; it described regulatory tightening as a market concern.