Asian chip stocks tumbled on Tuesday, with SK Hynix falling nearly 13% and Samsung Electronics dropping over 12%, as investors weighed reports that Nvidia is negotiating a $250 billion guarantee to help OpenAI lease a 10-gigawatt data center campus in Ohio. The sell-off erased billions in market value across Korea, Japan, and Taiwan in a single session, fueled by concerns that Nvidia's financial backstop role signals fragility in AI-linked demand.
Nvidia's Financial Backstop
Nvidia is reportedly in talks to provide a $250 billion guarantee to secure the lease for OpenAI's planned Ohio data center, a project that could cost more than $500 billion in total. The chipmaker is also discussing financing for OpenAI's chip purchases, worth up to $350 billion more. Investors have questioned whether Nvidia's willingness to underwrite such massive commitments indicates that AI demand is not as robust as previously thought, or that OpenAI itself lacks the capital to fund its own expansion.
The reports come as the broader semiconductor sector faces a reality check after months of AI-driven euphoria. The sell-off hit memory makers particularly hard, with SK Hynix and Samsung both losing more than a tenth of their value in early trading.
Chinese Rivalry Heats Up
While Korean and Japanese chip stocks cratered, Chinese memory maker CXMT saw its shares surge as much as 500% from their IPO price during Monday's Shanghai trading debut. The rally valued the company near $515 billion, underscoring investor enthusiasm for domestic chip champions.
Adding to the pressure on Korean leaders, a state-backed Chinese firm has begun mass-producing homegrown deep ultraviolet lithography machines for SMIC, Hua Hong, and CXMT. This move reduces Beijing's reliance on Dutch equipment maker ASML for advanced chipmaking tools. Analysts estimate the high-bandwidth memory gap between CXMT and Korean leaders has narrowed to three years from over five years, threatening the AI chip deals SK Hynix and Samsung have signed with U.S. hyperscalers.
Analyst Views on the Sell-Off
Owen Lamont, senior vice president at Acadian Asset Management, said no one knows how AI will affect the economy and that leveraged ETFs may magnify swings. His caution reflects a broader uncertainty about the sustainability of AI-related spending.
Sundeep Gantori, chief investment officer for equities at Standard Chartered, argued the long-term opportunity remains intact for memory makers, citing broker forecasts of a 2027 price peak. He suggested the current sell-off may be an overreaction to short-term noise.
Investors now turn to SK Hynix's quarterly earnings later this week for further clarity on the memory market outlook. The results will be closely watched for signs of whether demand from AI hyperscalers is holding up or beginning to soften.
