Micron, SK Hynix, Samsung Electronics, ASML shares: tech stocks fall

Technology stocks fell Tuesday, extending a sell-off sparked by worries over artificial intelligence financing and intensifying competition.

Memory chip giant Micron was down around 5% in U.S. premarket trading.

Other memory-related stocks such as SanDisk, Seagate and Western Digital were all sharply lower. SanDisk fell 5% while Seagate and Western Digital both dropped 7%.

The slide, which follows declines on Wall Street on Monday, comes as investors assessed intensifying competition from China’s ChangXin Memory Technologies, or CXMT.

Over the weekend, CXMT announced significant progress in developing a new chip architecture, designed to increase memory density by packing more data into a smaller space.

CXMT is China’s leading rival to the likes of Micron and South Korean heavyweights SK Hynix and Samsung Electronics. Analysts broadly see CXMT as trailing the U.S. and South Korean memory leaders, which means any advancement from the Chinese firm could add more competition to the market leaders.

“Investors are jittery and looking for excuses to take profit on AI-related stocks that have outperformed this year, especially memory stocks,” said UBP’s senior equity advisor Vey-Sern Ling.

“In reality, while the Chinese memory makers can potentially become a threat to global demand-supply balance over time, in the short run they continue to face technology hurdles, especially for more advanced memory like HBM,” Ling told CNBC via email.

CXMT shares closed 2.8% lower in Shanghai.

Adding fuel to the sell-off was a post by Tesla and SpaceX boss Elon Musk, who said China has the ability to scale production once it figures out how to manufacture something.

“When China figures out how to manufacture a product, their ability to scale is often greater than the rest of the world combined,” Musk said on Monday.

European chip stocks also sank in early morning trade, with semiconductor equipment maker ASML down 3.3%, and STMicroelectronics and German chip maker Infineon both down 5%. Dutch firms BE Semiconductor and ASM International were both around 4% lower at the open.

Shares of South Korean chip giant SK Hynix, a leading supplier of high-bandwidth memory chips used in artificial intelligence applications, plunged more than 10%, while rival Samsung Electronics shed 7.4% — both hitting their lowest levels since August. SK Hynix’s U.S.-listed stock was down around 5% in premarket trading.

In Japan, shares of tech-focused investment giant SoftBank Group sank 8.5%. The group, which has significant exposure to the global AI industry through its huge investment in OpenAI, led a broader retreat in Japanese semiconductor and electronics shares. 

Tokyo Electron, a major supplier of chipmaking equipment, dropped 7.2%, while Advantest, which makes semiconductor testing equipment, declined 2.9%. Other Japanese technology stocks also came under pressure.