Chip stocks slide after Broadcom boss likens AI investing to 'casino'

Semiconductor stocks plunged across Asia after news that Chinese memory-chip maker CXMT reported progress on a new DRAM architecture that would boost memory density and after Broadcom’s chief executive likened much AI investing to casino-like speculation. South Korea’s Kospi fell 6.25% as Samsung Electronics dropped 7.4% and SK Hynix tumbled 10%; other tech names also slid (TSMC ~2% down, Tokyo Electron -7.15%, SoftBank -8.5%). US chipmakers including Micron and major AI-related names such as Nvidia, AMD and Broadcom saw declines, and futures pointed to a mixed Wall Street open. CXMT, which debuted strongly on Shanghai’s market in July, raised fears it could intensify competition with the world’s largest memory suppliers and accelerate margin pressure.

Broadcom’s Hock Tan argued many investors do not understand what they’re buying in the AI boom, setting unsustainably high expectations while businesses remain loss-making because of huge training and infrastructure costs; he noted OpenAI’s annualized revenue run rate of about $50bn at the end of September still coexists with heavy spending. Analysts highlighted that a large share of AI revenues is from pilots rather than enduring contracts and warned that rapid, debt-funded investment in AI infrastructure plus rising Chinese competition could trigger further volatility and squeeze profitability across the chip sector.