Samsung Electronics, SK hynix fall as U.S. tech stocks tumble

South Korean semiconductor stocks fell sharply early Friday after major U.S. technology stocks, including Alphabet Inc. plunged overnight amid renewed concerns over the profitability of artificial intelligence (AI) investments.

Samsung Electronics shares fell 2.16 percent to 227,000 won ($169.7) as of 9:04 a.m., while its preferred shares dropped 4.57 percent to 175,500 won. Samsung Electronics’ losses later widened to more than 3 percent.

SK hynix, which had outperformed Samsung in the previous session, slid 5.37 percent to 1.44 million won, with its decline later exceeding 6 percent.

Other related stocks also fell, including SK square Co., down 3.15 percent, Samsung Life Insurance Co., down 3.6 percent, and Samsung C&T Corp., down 3.25 percent.

Weakness extended to small and mid-cap semiconductor equipment and materials stocks on the Kosdaq.

Jusung Engineering Co. shares fell 2.99 percent, EO Technics Co. 4.94 percent, Simmtech Co. 5.83 percent and Leeno Industrial Inc. 4.86 percent.

The declines followed a broad sell-off in U.S. technology stocks as concerns resurfaced over returns on AI investments.

Alphabet, Google’s parent company, plunged 12.64 percent after reporting revenue below market expectations and a sharp increase in cash spending related to AI. Micron Technology Inc. fell 4.98 percent, Advanced Micro Devices Inc. (AMD) lost 2.08 percent, and SK hynix’s U.S.-listed American depositary receipts (ADRs) declined 1.58 percent.

The Philadelphia Semiconductor Index fell 1.42 percent.

“Individual stocks would likely diverge based on third-quarter results and the outlook for fourth-quarter earnings, including whether forecasts are maintained or raised,” said Yang Hyun-kyung, an analyst at iM Securities Co.

Separately, Hyundai Motor Co. shares also fell in early trading Friday.

The stock was down 2.05 percent at 286,500 won as of 9:26 a.m. It opened 2.91 percent lower and briefly fell as much as 4.79 percent to 278,500 won.

The decline came after the automaker reported lower third-quarter revenue amid production disruptions from labor strikes and weaker global demand.

Hyundai Motor’s operating profit rose to 2.68 trillion won, about 10 percent above the market consensus of approximately 2.44 trillion won. Global wholesale sales, however, fell 11.3 percent from a year earlier to 921,000 vehicles.

Revenue fell 3.4 percent to 45.11 trillion won, marking the first year-on-year decline in quarterly revenue in more than six years.

Brokerages have lowered their price targets for the automaker, citing concerns over its earnings outlook and shareholder returns.

“The cut in Hyundai Motor’s full-year operating margin guidance to 5.5-6.5 percent from 6.3-7.3 percent could keep the shares volatile until an earnings recovery next year is confirmed,” said Park Kwang-rae, an analyst at Shinhan Securities.

He lowered his price target to 550,000 won from 630,000 won.

Shin Yoon-cheol, an analyst at Kiwoom Securities, pointed to uncertainty over the company’s shareholder return policy, particularly the possibility of reduced share buybacks, as a potential drag on investor sentiment. He cut his price target to 500,000 won from 600,000 won.

Yuanta Securities Korea Co., on the other hand, raised its price target to 440,000 won from 410,000 won, citing continued cost-cutting efforts and a higher earnings forecast for Hyundai Motor’s automotive business next year. The revised target remained the lowest among brokerages.

Meanwhile, Intellivix Co., a deep-tech company specializing in safety AI, more than doubled its initial public offering price on its Kosdaq debut Friday, while golf technology company Creatz Inc., which also made its Kosdaq debut, fell more than 30 percent.

Intellivix shares were trading at 19,750 won as of 9:36 a.m., up 119.44 percent from its IPO price of 9,000 won.

The company provides AI-based monitoring platforms, including VIX 2.0, an AI engine trained on industrial and social infrastructure data, and GenAMS, an integrated safety monitoring platform.

The strong debut came as concerns over the profitability of AI investments showed signs of easing during the latest round of third-quarter earnings announcements by technology companies at home and abroad.

Creatz was trading at 10,270 won, down 31.53 percent from its IPO price of 15,000 won.

The company develops golf technology products and services, including launch monitors that measure the movement of golf balls and clubs, golf simulation software and AI-powered swing analysis services.