Nikkei 225, Kospi Rebound as SK Hynix Earnings Lift Chip Stocks

Key Takeaways

The Nikkei 225 and Kospi rebounded on July 29 after suffering steep technology-led losses in the previous session. Record quarterly earnings from SK Hynix helped restore confidence in the AI memory market, lifting Samsung Electronics, Kioxia and other semiconductor stocks. However, earnings expectations, Chinese competition and the scale of future AI spending remain important risks for the sector.

Asian Stock Markets Recover After Sharp Chip Sell-Off

Japanese and South Korean equities staged a strong recovery on Wednesday, July 29, as investors returned to semiconductor stocks following one of the region’s sharpest technology sell-offs of 2026.

Japan’s Nikkei 225 briefly moved back above 63,000 points, gaining more than 1% during the session. The index closed 3.95% lower at 62,364.92 on Tuesday as selling pressure spread across AI-related and semiconductor shares.

South Korea’s Kospi climbed as much as 2.76%, temporarily reaching approximately 6,190 points. The rebound followed a 10.84% plunge on July 28, when the benchmark lost 732.09 points to close at 6,023.66. Trading curbs were triggered as losses accelerated across the market.

The decline had been amplified by the Kospi’s heavy exposure to Samsung Electronics and SK Hynix. Together, the two companies represent a substantial part of the index, meaning large movements in their shares can quickly affect the wider South Korean market.

Regional sentiment improved after SK Hynix reported record quarterly results and offered a relatively positive assessment of long-term demand for artificial intelligence memory. The Kospi rose by more than 1% and the Nikkei advanced around 1% during the broader Asian recovery.

SK Hynix Earnings Restore Confidence in AI Memory Demand

SK Hynix reported revenue of 79.32 trillion won for the second quarter of 2026, representing an increase of 257% from the same period a year earlier. Operating profit reached a record 60.54 trillion won, up 557% year over year, while the operating margin expanded to 76%.

Net profit climbed to 93.92 trillion won, partly reflecting investment-related gains. The company also generated enough cash to increase its cash and cash equivalents to 88 trillion won while reducing total debt to 18.6 trillion won.

Despite reaching record levels, revenue and operating profit came in below market expectations of approximately 83.9 trillion won and 64.2 trillion won, respectively. The initial disappointment explains why the results did not produce an immediate, uninterrupted rally in the company’s shares.

Investor attention soon shifted towards SK Hynix’s outlook for AI memory demand and production capacity. The company said expanding AI infrastructure investment continued to support demand for high-performance server memory, high-bandwidth memory and enterprise solid-state drives.

SK Hynix has completed long-term supply agreements with around ten customers and remains in discussions with other major technology companies. These multiyear agreements could provide greater visibility over future demand while reducing some of the volatility traditionally associated with the memory-chip cycle.

The company also began mass shipments of HBM4 during the second quarter and plans to increase production in the second half of 2026. HBM4 is designed for advanced AI accelerators and data-centre systems, making its production progress an important indicator of SK Hynix’s ability to maintain its position in the AI memory market.

Samsung, SK Hynix and Kioxia Lead the Rebound

SK Hynix shares rose more than 3% during Wednesday’s session, recovering part of the previous day’s decline. The stock traded near 1,608,000 won after falling 14.7% on Tuesday.

Samsung Electronics gained more than 4%, temporarily reaching approximately 230,000 won. The rebound indicated that investors were treating SK Hynix’s results as a positive signal for the wider memory market rather than viewing the earnings miss as evidence that the AI cycle was weakening.

Samsung had fallen 14.4% on July 28, its biggest one-day decline since October 2008. The size of Tuesday’s losses suggests that forced selling, leveraged-product activity and short-term risk reduction contributed to the decline alongside concerns about industry fundamentals.

Japanese memory manufacturer Kioxia also rebounded strongly, rising more than 7% and becoming one of the better-performing Nikkei 225 constituents. The shares had been among the hardest hit during the previous session as investors reduced exposure to NAND flash and DRAM-related companies.

The recovery extended beyond individual earnings. Following a broad sell-off in global semiconductor stocks, valuations had fallen rapidly, encouraging short covering and selective bargain buying. However, one day of gains does not necessarily confirm that the correction has ended.

AI Spending and Chinese Competition Remain Key Risks

SK Hynix’s results confirmed that current demand for AI-related memory remains strong. Revenue from high-value products benefited from higher DRAM and NAND prices, while HBM and AI server products supported the company’s record profitability.

Nevertheless, the market remains divided over whether the industry’s rapid capital expenditure can generate sustainable returns. SK Hynix, Samsung, Micron and Chinese manufacturers are all expanding production, raising questions about whether increased supply could eventually place pressure on memory prices.

Competition from China has become another important concern. The market debut of ChangXin Memory Technologies, combined with progress in China’s domestic semiconductor equipment industry, contributed to Tuesday’s sell-off. Investors are evaluating whether faster Chinese capacity expansion could challenge the pricing power and market shares of South Korean and US memory producers.

SK Hynix believes customer demand continues to exceed available supply. The company is accelerating production at its M15X facility and preparing additional capacity at the Yongin semiconductor cluster, while maintaining what it describes as capital expenditure discipline.

Distinction is important. Continued investment supports future HBM and AI server demand, but excessive capacity additions could increase the risk of another memory supply cycle if technology companies reduce spending.

What Comes Next for the Nikkei 225 and Kospi?

Samsung Electronics’ full second-quarter earnings release will be the next major test for regional semiconductor sentiment. Its earnings call is scheduled for 10:00 a.m. Korean time on July 30. Investors will focus on memory pricing, HBM development, foundry performance and the company’s capital expenditure outlook.

US technology earnings will also influence the direction of Asian chip stocks. Guidance from major cloud and AI companies can provide evidence of whether demand for data-centre processors, HBM and storage products will remain strong during the second half of 2026.

Monetary policy adds another source of volatility. Interest-rate decisions and guidance from the Federal Reserve and Bank of Japan could affect technology valuations, bond yields, the Japanese yen and broader risk appetite.

The July 29 rebound shows that investors are still willing to return to semiconductor stocks when earnings support the AI demand narrative. However, the Nikkei 225 and Kospi remain sensitive to changes in AI spending expectations, memory prices, Chinese competition and leveraged market positioning. Further gains may therefore depend on whether upcoming company results confirm that the sector’s rapid profit growth can continue.