Kioxia Plunges 18% as AI Financing Fears Spark Global Chip Rout

Shares of Japanese memory chipmaker Kioxia Holdings Corp. plunged 18.3% in Tokyo trading, hitting their daily limit-down price as a wave of selling swept through the global semiconductor sector. The selloff was fueled by investor anxiety over the financial underpinnings of the artificial intelligence boom and fresh signs of rising competition in the memory market.

A Cascade of Negative Catalysts

The rout in chip stocks was reportedly triggered by concerns over the sustainability of AI-related investment, with reports circulating that Nvidia may be involved in complex financing arrangements for a major customer. According to Investing.com, this news rattled confidence across the entire AI supply chain, hitting memory producers particularly hard.

The immediate trigger for Kioxia's decline was a sharp drop in a U.S. peer during the prior session. Western Digital Corp. (WDC), which owns the SanDisk brand, fell more than 11%, leading to direct sympathy selling in Kioxia shares at the market open in Tokyo.

Adding to the pressure were reports that Chinese state-backed companies have successfully developed domestic immersion DUV lithography equipment. This development stoked fears of accelerated competition in the NAND memory sector, which could erode pricing power and profit margins for established players like Kioxia.

Regional Market Meltdown

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Kioxia's collapse occurred within a broader market downturn across Asia, amplifying the stock's losses. The selloff was not isolated, indicating a region-wide loss of investor confidence in the technology sector.

Key regional market movements included:

• Japan's Nikkei 225 index tumbled approximately 4%, at one point falling to its lowest level in about two months.
• South Korea's Kospi index plunged sharply enough to trigger a 20-minute exchange-wide circuit breaker, with memory giants Samsung Electronics and SK Hynix sustaining heavy losses.
• Taiwan's Taiex index also fell by more than 4%, highlighting the widespread nature of the tech-led market retreat.

Market Impact

The combination of factors made Kioxia the worst-performing stock on the Tokyo Stock Exchange Prime Market for the day, closing at its limit-down price of ¥44,550 on extraordinary trading volume. The sharp reversal marks a significant downturn for the stock, which had reached an all-time high of ¥112,700 just weeks earlier.