Samsung Falls 6.35%, SK Hynix 10.44% as Fears Grow Over AI Data Center Regulation
Key Facts
South Korean chip stocks closed sharply lower in Seoul on November 6, with Samsung Electronics down 6.35% at 188,700 won and SK hynix falling 10.44% to 1,132,000 won. The losses came as the KOSPI dropped 6.02% to 5,059.69 points. Market coverage linked the sell-off to growing concern that the United States could tighten regulation of AI data centers after the midterm elections. A researcher at Daishin Securities said, "The main reason for the decline in the domestic market is mounting concern over the regulation of AI data centers following the U.S. midterm elections." The share-price moves reflect a broader reassessment of risks facing semiconductor companies and their value chains.
Pressure spread across the South Korean market, with the KOSPI down 10.98% over two sessions compared with its November 4 close of 5,683.80 points. The index had fallen 5.28% in the previous session, on November 5, according to market coverage published the following day. On November 6, foreign investors were net sellers of 2.7691 trillion won in shares. This compared with net purchases of 1.7042 trillion won by institutions and 601 billion won by individuals. The flows indicate that domestic investors' buying did not offset foreign selling pressure during the session.
Seoul's losses coincided with sharp declines in U.S. technology and chip stocks in the November 5 session. Nvidia fell 9.3%, while Micron and SanDisk shares dropped 17.5% and 22.3%, respectively. The Philadelphia Semiconductor Index also declined 12.25%. The performance places pressure on Samsung and SK hynix shares within a broader sell-off in companies linked to AI and memory. Aju Press coverage said concerns about a slowdown in investment had spread from data centers to semiconductor companies and their value chains.
Political concerns centered on Democrats winning both the Senate and the House of Representatives, and what that could mean for tighter rules or slower construction of AI data centers. Statements by Texas's governor-elect about suspending approvals for new projects until safeguards for residents were in place heightened investors' sensitivity to the possibility of construction delays. But those statements were not an effective U.S. decision to impose restrictions on the sector. Nor did project-tracking data cited by Aju Press show that the election results had led, up to that point, to cancellations or widespread construction suspensions. Analysts said fears of a sharp drop in AI investment and the U.S. economy were "overstated at this stage," and a complete halt to data center construction was unlikely.
The sell-off comes as Samsung's quarterly results showed strong revenue and profit. The company reported on October 29 revenue of 195.3 trillion won in the third quarter, up 14% sequentially, and operating profit of 107.4 trillion won. It said its memory business posted a new quarterly record for revenue and profit amid capacity constraints, while strong server demand lifted market prices across applications. In its outlook for the fourth quarter of 2026, the company tied continued infrastructure investment to the race for AI leadership. It added that memory demand growth would be concentrated around new CPU and GPU platform products.
Samsung also said it expects demand for its AI-related chips to accelerate through 2027, exceeding supply as customers expand infrastructure. The outlook sets the sector's growth bets against investor concerns that the pace of investment could change or be affected by regulation. Samsung and SK hynix announced plans in June for a joint investment of 800 trillion won in a chipmaking complex in southwestern Korea. The scale of the plan underscores the companies' reliance on continued investment in AI and semiconductor infrastructure. The published fourth-quarter outlook indicates that Samsung expects investment to continue and memory demand to grow during that period.