Samsung, SK Hynix slide amid Nvidia financing worries, China competition

July 28, 2026 - 08:39

Shares of South Korea's two biggest memory chip makers, Samsung Electronics and SK Hynix, fell sharply on Tuesday as investor concerns mounted over two major headwinds: potential financing issues for key customer Nvidia and intensifying competition from Chinese rivals.

Samsung dropped more than 3 percent, while SK Hynix lost over 4 percent in early trading, dragging down the broader Kospi index. The selloff was triggered by reports that Nvidia, the dominant player in AI chips, may face delays in its next-generation chip rollout due to financing constraints. Nvidia relies heavily on high-bandwidth memory supplied by SK Hynix and Samsung, and any slowdown in its production cycle would directly impact demand for these advanced memory products.

Adding to the pressure, Chinese memory manufacturers are ramping up output of older-generation DRAM and NAND flash chips, flooding the market with lower-priced alternatives. This has squeezed margins for South Korean firms, which have been banking on AI-driven demand to offset a slump in traditional memory segments. Analysts noted that while Samsung and SK Hynix maintain a technological edge in cutting-edge chips, the price war in legacy products is eating into their profitability.

The dual concerns have erased recent gains for both stocks, which had rallied earlier this year on optimism around artificial intelligence. Investors are now watching for signs of a recovery in global chip demand, as well as any updates on Nvidia's financing situation. Without a clear catalyst, the sector remains vulnerable to further volatility.