SK hynix and Samsung Electronics stocks are weak early on the 1st. Investor sentiment has worsened due to news that Chinese Alibaba is developing its own artificial intelligence (AI) chips and that the U.S. will introduce new regulations.
As of 9:22 a.m. on the same day, SK hynix is trading at 259,000 won, down 10,000 won (3.72%) from the previous trading day. Samsung Electronics is trading at 68,100 won, a 2.30% drop at the same time.
On the previous trading day, Aug. 29, the U.S. stock market sharply declined, particularly in tech stocks, following news that the Chinese e-commerce company Alibaba had produced a next-generation artificial intelligence (AI) chip. As a result, selling pressure on major domestic semiconductor stocks, SK hynix and Samsung Electronics, appears to be continuing.
Additionally, the U.S. Department of Commerce noted that starting next year, major semiconductor corporations, including Samsung Electronics and SK hynix, will need to obtain individual licenses for bringing U.S.-made semiconductor equipment into their factories in China, which has also impacted the situation (VEU system abolishment).
Ryu Young-ho, a researcher at NH Investment & Securities, said, "The new lines and processes at Samsung Electronics and SK hynix are planned for domestic production and investment, and the focus in the China region is on maintaining the status quo, so the short-term impact of the abolished 'verified end user (VEU)' system is limited."
However, Ryu noted, "Since a significant portion of the production capacity (CAPA) relies on China, there is a need for strategic consideration regarding the operation of the two companies' factories in China going forward."