--- title: "Why Did AI Semiconductors Pull Back? Three Key Reasons and How to Respond" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/42707620.md" description: "Recently, AI concept stocks and the semiconductor sector have experienced significant corrections. Hong Kong's Hang Seng Index, Hang Seng Tech Index, as well as the US S&P 500, Nasdaq 100, and Dow Jones Industrial Average have all seen varying degrees of adjustments, with South Korea's KOSPI index showing relatively large volatility. As investor education, this article focuses on analyzing three core factors to help everyone rationally view this wave of market adjustments and avoid being misled by single news events. 1. The Core Reason for SK Hynix's Decline: Profitability, Not Simply Deleveraging SK Hynix's recent stock price performance has been quite volatile..." datetime: "2026-07-16T02:07:55.000Z" locales: - [en](https://longbridge.com/en/topics/42707620.md) - [zh-CN](https://longbridge.com/zh-CN/topics/42707620.md) - [zh-HK](https://longbridge.com/zh-HK/topics/42707620.md) author: "[易方达香港](https://longbridge.com/en/profiles/8787667.md)" --- # Why Did AI Semiconductors Pull Back? Three Key Reasons and How to Respond Recently, AI concept stocks and the semiconductor sector have experienced significant pullbacks. Hong Kong's Hang Seng Index, Hang Seng Tech Index, as well as the US's S&P 500 Index, Nasdaq 100 Index, and Dow Jones Industrial Average have all seen varying degrees of adjustment, with South Korea's KOSPI Index experiencing relatively large fluctuations. As part of investor education, this article focuses on analyzing three core factors to help everyone view this wave of market adjustment rationally and avoid being misled by single pieces of news. 1\. **The Core of SK Hynix's Decline: Profitability, Not Simply Deleveraging Factors** SK Hynix's recent stock price performance has been quite volatile, with some market participants interpreting it as being affected by details related to its US listing and deleveraging in the South Korean market. According to Bloomberg data, as of July 14, 2026, Hynix's American Depositary Receipts (ADRs) had been listed for only three trading days, with the premium relative to the local South Korean stock price rapidly widening to over 50% at one point, indicating that the market remains highly focused on this stock. However, the biggest controversy in the market regarding Hynix currently still lies in **the company's profitability**. Of particular focus is the research report published on July 13 by **Minsook Chae**, a semiconductor analyst at Korea Investment & Securities (KIS). The report points out that Hynix's core problem lies in LTA (Long-Term Supply Agreement) price locking, which has prevented HBM price increases from keeping pace with the overall DRAM price surge, resulting in profitability falling short of market expectations. This means that while the company's revenue has grown, its gross margin has not expanded as expected, and the **market narrative has shifted from 'strong growth' to 'profitability below expectations'**. Coupled with increased market attention to regulatory risks associated with leveraged products, selling pressure has further intensified. **After understanding this logic, it becomes clear that these issues do not represent a weakening of downstream demand**. The medium-to-long-term trend of demand for high-bandwidth memory driven by AI computing power remains strong. It's simply that the short-term pace of profit realization has been slower than expected, triggering a rotation of funds away from the hard tech sector. This is a typical narrative correction, not a fundamental reversal. 2\. **Concerns Over Hyperscaler CAPEX Triggered by META's Compute Power Sale** After META sold some of its compute power, market concerns arose regarding the capital expenditure (CAPEX) expectations of Hyperscalers (ultra-large-scale cloud providers), with worries about a slowdown in AI infrastructure investment. However, looking at public data, the situation is not that simple: According to data from the OpenRouter platform, Meta's own large model's token usage is relatively low (not in the top ten), but **the overall token usage of models is still continuously rising**. This indicates that AI demand is still expanding; it's just that Meta may have chosen to adjust its compute power allocation due to its own models' performance falling short of expectations. A more noteworthy long-term risk is **the persistently high prices in the hardware supply chain**: Key materials like PCBs (Printed Circuit Boards) are experiencing price increases and tight supply. Expansion of new chip production capacity is hindered. End manufacturers like Apple have already reflected cost pressures through product price hikes, indicating that profits are being squeezed. The market is now focusing on Hyperscalers' execution efficiency and cost control regarding AI capital spending. The outlook and views on the industry provided by major tech companies when they announce their Q2 results will be important variables affecting the medium-term trend of the sector. 3\. **Geopolitical and Macro Liquidity Risks Amplify Volatility** In addition to adjustments in industry narratives, macro and geopolitical factors have also amplified this wave of decline: The situation in Iran has become a market focus, with energy prices remaining high. The Federal Reserve's interest rates remain high, with the July 29th and September 16th policy meetings drawing significant attention, and expectations for rate hikes continue to heat up. In a high-interest-rate environment, the valuation pressure on growth-oriented tech stocks increases, risk appetite among funds declines, and emotional selling is more likely to occur. **Summary: Narrative Correction + Sentiment Shock, Not a Trend Reversal** This wave of decline is essentially the result of a **phased correction in industry and individual company narratives**, compounded by liquidity and market sentiment shocks. In the short term, it is a capital rotation adjustment, not a fundamental breakdown in the AI technology industry chain. **The medium-to-long-term fundamentals are still worth watching**: Demand for AI computing power infrastructure continues to grow. Structural opportunities in key areas like memory chips (especially HBM) remain unchanged. Overall token usage and developer activity are still trending upward, and the application and popularization of AI Agents remain key factors. Faced with the current volatile market conditions, **diversification** is an important strategy for effectively reducing non-systematic risks. Investors should focus their attention on real changes in the industry, supply chain resilience, and management's execution capabilities, avoiding blindly chasing rallies or selling in panics. In addition to diversifying holdings of key stocks through single-sector ETFs, one can further allocate ETFs or assets of **different types with low correlation**. Investors can also consider portfolio configurations combining multiple investment targets with **different risk-return characteristics**. For example, the high-dividend sector is often more focused on energy and financial industries, which have shown relative resilience amid recent energy price increases and AI-related volatility. This is precisely an effective risk management method when facing volatile markets. E Fund HKEX Tech (3456): One-click investment in Chinese tech, covering six major sectors E Fund Asia Semiconductor (3486): One-touch layout, Asia's semiconductor leaders E Fund Biopharma (3186): Aggregating the top 100 Hong Kong & US pharmaceutical stocks E Fund High Dividend (3483): Navigating bull and bear cycles, focusing on high dividends Important Information The issuer of this content is E Fund Management (Hong Kong) Limited. This content is for reference only and does not constitute an invitation or recommendation to invest in fund units. This content is for display purposes only and must not be shown to any person to whom such display would be unlawful. Investment involves risks, and you may lose most of your principal. Before investing, investors should carefully read the investment risks related to the fund in the offering documents (including the 'Risk Factors' section). This content has not been reviewed by the Securities and Futures Commission of Hong Kong. For detailed important notices and disclaimers regarding the above funds, please visit the E Fund (Hong Kong) website: [https://www.efunds.com.hk/tc/etfDisclaimers/](https://www.efunds.com.hk/sc/etfDisclaimers/) ### Related Stocks - [SKHYV.US](https://longbridge.com/en/quote/SKHYV.US.md) - [SKHY.US](https://longbridge.com/en/quote/SKHY.US.md) - [03186.HK](https://longbridge.com/en/quote/03186.HK.md) - [03486.HK](https://longbridge.com/en/quote/03486.HK.md) - [03456.HK](https://longbridge.com/en/quote/03456.HK.md) - [03483.HK](https://longbridge.com/en/quote/03483.HK.md) - [00HSI.HK](https://longbridge.com/en/quote/00HSI.HK.md) - [.SPX.US](https://longbridge.com/en/quote/.SPX.US.md) - [09483.HK](https://longbridge.com/en/quote/09483.HK.md) - [83483.HK](https://longbridge.com/en/quote/83483.HK.md) - [META.US](https://longbridge.com/en/quote/META.US.md)