South Korea, Taiwan, and Japan Chip Stocks Plunge in Unison Amid Fears of AI Compute Investment Peak

“Stress Test” of the Global Semiconductor Supply Chain: Simultaneous Collapse of Chip Stocks in Korea, Taiwan, and Japan—AI Compute Investment Cycle May Be Reaching a Phase-Specific Inflection Point

On the morning of June 26, an exceptionally rare cross-border, synchronized sell-off of semiconductor assets swept across Asia-Pacific markets: South Korea’s KOSPI Index plunged 8%, triggering a circuit breaker; Samsung Electronics and SK Hynix each fell over 9% in a single day; Japan’s Nikkei 225 Index dropped 4.6% intraday, dragging down SoftBank and numerous chip-equipment and materials stocks; Hong Kong equities also came under heavy pressure—Largan Precision plummeted more than 12% in one day, while AI model firms such as Zhipu AI and MINIMAX slid 8–10%; mainland A-share markets were no exception—the ChiNext Index fell 3.72% in the first half-day, with AI hardware-related segments—including CPO (co-packaged optics), optical modules, and servers—broadly declining; Telesign Information and Fiberhome Communications hit trading limits (down 10%), while Tacony Optoelectronics and Shijia Photonics tumbled over 10%. More than 4,600 A-share stocks closed lower, with total turnover reaching RMB 2.44 trillion in the morning session. This was not an isolated event, but rather a systemic repricing spanning all three major East Asian manufacturing hubs—and cutting across the entire value chain from design, fabrication, and packaging & testing to module assembly and end applications.

From “Certainty Narrative” to “Anxiety Over Timing of Realization”: A Quiet Shift in Market Logic

Since the start of this year, the global AI wave has generated robust, near-inevitable expectations for compute infrastructure investment, with capital expenditure expansion along the “GPU–HBM–advanced packaging–high-speed interconnect” pathway widely viewed as irreversible. Yet this collective collapse signals a pivotal shift in market perception: investors are moving away from macro-level judgments on whether to invest, toward micro-level, cautious assessments of when returns will materialize—and whether demand can absorb the massive supply ramp-up. The core tension has shifted from debates over technical roadmaps to hard constraints: inventory levels, capacity utilization rates, and visibility into future order flows.

Take memory chips as an example: Samsung’s and SK Hynix’s sharp declines did not stem from deteriorating short-term earnings—their Q1 results remained resilient—but rather reflected the market’s collective pricing-in of slower-than-expected HBM3 order intake and extended customer inventory digestion cycles. According to the latest TrendForce data, global DRAM average selling prices rose only 0.4% quarter-on-quarter in Q2 2024, while NAND Flash prices fell 2.1%—far below earlier market expectations of double-digit growth. When the singular narrative of “exploding AI server demand” collides with divergent end-user procurement rhythms—such as cloud providers shifting from aggressive stockpiling to just-in-time replenishment—and sluggish recovery in traditional demand drivers like PCs and smartphones, the marginal return on capital expenditures is now being recalculated.

Geopolitical Variables Escalate: Export Control Expectations Amplify the “Stress Test”

Notably, this selloff coincided temporally with rumors that the U.S. Department of Commerce plans to tighten export controls on advanced-process semiconductor equipment destined for China. Though formal rules have yet to be published, markets have already interpreted this development as a “stress test” for the sustainability of global semiconductor capex. The logic is clear: if new regulations meaningfully restrict exports of critical tools—including EUV lithography systems and atomic layer deposition (ALD) equipment—to China, they would not only impede foundries like SMIC in their capacity expansion efforts, but also accelerate TSMC’s and Samsung’s capex commitments for new fabs in the U.S. and Europe—thereby exacerbating structural oversupply risks in global wafer-fab capacity. Once “geopolitical costs” become a hard, non-negotiable line item in capex budgets, the original cost-curve assumptions—based purely on economies of scale—are fundamentally invalidated. The Nikkei’s chip-stock leadership in the decline and SoftBank’s steep drop reflect deep market concern over the cost-efficiency trade-offs entailed by global supply-chain restructuring.

Full Transmission Chain Exposed: Valuation Anchors Shift—from Wafer Fabs to Optical Modules

The exceptional penetration of this selloff lies in its precise mapping of vulnerability across every link in the value chain: cooling sentiment at upstream wafer fabs (Samsung, SK Hynix) → downward revisions to order forecasts for midstream packaging & testing players (ASE Group, Powertech Technology) → valuation pressure on downstream optical module suppliers (Largan Precision), whose AI PC/server lens demand has slowed → contagion-driven sell-offs of end-application AI model companies (MINIMAX, Zhipu AI), whose compute procurement budgets may now face downward adjustment. This top-down repricing exposes a profound paradox in today’s AI investment logic: enhanced model capabilities depend on leaps in compute power, which in turn hinge entirely on sustained, high-intensity capital investment. Once signs of even marginal capex deceleration emerge, the entire ecosystem’s valuation foundation faces systemic scrutiny.

Particularly worrisome is Largan Precision’s >12% single-day plunge—not a random occurrence. As the world’s leading smartphone lens supplier, its strategic pivot toward AI PCs, automotive vision systems, and AR glasses had been met with high expectations. Yet this selloff signals that markets no longer pay premiums for “potential use cases”; instead, they now demand demonstrable revenue conversion and gross margin support. This foreshadows a rapid shift in A-share valuation anchors for semiconductor equipment, materials, and packaging & testing firms—from the “domestic substitution opportunity” narrative toward a three-dimensional calibration based on realized order fulfillment rate, technical validation progress, and cash flow quality.

Implications for A-Shares: Moving Beyond Linear Extrapolation Toward a “Tiered Validation” Paradigm

For A-share investors, this cross-border chain reaction carries directional significance. First, it punctures the valuation bubble surrounding certain segments—where “any stock linked to AI automatically rallies.” This forces investors back to fundamentals: for instance, the simultaneous涨停 (trading limit up) of photolithography-related stocks (e.g., Tongcheng New Materials, Yawei Co., Ltd.) and the trading-limit-down of CPO stocks confirms markets are conducting granular filtering—rewarding firms with concrete progress in domestic equipment breakthroughs, while swiftly purging concept-driven speculation lacking real orders. Second, it serves as a stark warning: the global semiconductor cycle has entered a new phase defined by the triple overlay of policy volatility, inventory cycles, and technology node transitions. Simply applying historical inventory-cycle models may now yield misleading conclusions. Instead, a dynamic evaluation framework must incorporate geopolitical sensitivity, health of customer mix, and capability to secure strategic technology-node positions.

In the near term, U.S. May merchandise trade balance and the final reading of the University of Michigan’s consumer sentiment index could further amplify market volatility. Mid-term, China’s May industrial enterprise profit data will serve as a critical litmus test for the resilience of domestic manufacturing capex. As the euphoria of the “AI compute arms race” recedes, what remains will be truly hard-core enterprises—those possessing deep technological moats, strong customer stickiness, and self-sustaining cash flow generation. This stress test across the global semiconductor value chain will ultimately eliminate illusions—and leave only proven performance.