South Korea’s Kospi closed down nearly 11% on Tuesday, its eighth circuit breaker of 2026 and one of the worst days of the year. South Korea’s famously volatile retail market is now infecting Western markets: the American semiconductor index SOX fell as much as 6% Tuesday, a fourth straight losing session and its longest streak this year, dragging the Nasdaq-100 down 9.7% from its record high—just short of a correction.
Yet the panic doesn’t square with what’s happening on the ground. Memory prices just keep going up, not down. Third-quarter contracts for DRAM are settling 20%-30% higher this month. Google and Meta have signed contracts locking in prices and volumes for five years, and analysts generally don’t expect meaningful new supply until 2028.
“Right now there’s a lot of panic around the AI investment,” Gil Luria, a technology analyst at DA Davidson, told Fortune, “and the panic appears to be indiscriminate.”
What gives? Well, three explanations are circulating. First, the Chinese memory maker CXMT made its debut Monday, surging 466% in Shanghai after raising $8.6 billion. Second, the Information reported that a Chinese state-based company has begun mass producing immersion deep ultraviolet (DUV) lithography machines, which is a fancy way of saying that it’s doing something that ASML has only been able to do for about a decade. And third, fears about hyperscalers over-spending on the heavy-industry of AI have grown into the “panic” Luria describes.
