Chip stocks saw their declines deepen during the afternoon trading session. At the time of writing, SHANGHAI FUDAN was down 8.11% at HK$47.6, while GIGADEVICE fell 5.76% to HK$353.4. HUA HONG SEMI dropped 5.81% to HK$87.5, ASMPT declined 5.26% to HK$102.7, and SMIC decreased 4.33% to HK$61.8.

The market movement follows reports that hedge funds, which had aggressively purchased emerging market equities, are now hastily reassessing their positions. This shift comes as stocks and currencies in some developing nations weakened following military actions involving the US and Israel against Iran. Popular chip stocks such as TSMC, Samsung, and SK Hynix are also facing revaluation risks. On Tuesday, share prices for SK Hynix and Samsung Electronics saw losses widen to nearly 10%.

Notably, SK Hynix has announced an additional investment of $15 billion, marking the first major move in a global expansion of memory chip production. According to analysis from Kaiyuan Securities, memory chips are fully transitioning into a "seller's market," driven by growing AI demand and constraints on cleanroom capacity. To address current supply bottlenecks and position themselves for the upcoming demand peak fueled by AI, proactive capacity expansion has become an essential strategy for leading manufacturers. The substantial follow-on investment by SK Hynix is viewed as a clear signal of the impending global ramp-up in memory production.