Stocks extend losses late Monday morning on chip profit

Samsung Electronics and SK Hynix rejected a proposal from Korea Electric Power Corp to prepay US$18 billion for electricity to fund grid construction for new tech clusters. The chipmakers cited uncertainty over the semiconductor boom's longevity. Kepco aimed to reduce bond reliance for funding.

SK hynix and Samsung Electronics rejected KEPCO's proposal to prepay 5 trillion won and 20 trillion won, respectively, for future electricity costs. The prepayments were intended to fund grid infrastructure for semiconductor clusters. Both companies cited uncertainty about future demand as the reason for their refusal.

AI-linked stocks in Asia fell sharply after CEOs of Anthropic, xAI, and OpenAI called for slowing AI development. OpenAI's Altman said no IPO this year. Shares of SoftBank, Kioxia, Tokyo Electron, TSMC, SK Hynix, Samsung, and others dropped. Concerns over AI risks and Middle East tensions weighed on sentiment.

Hyundai Motor Group invested in Commonwealth Fusion Systems (CFS), a Bill Gates-backed nuclear fusion startup, as part of a $1 billion funding round. CFS aims to commercialize fusion energy by the early 2030s, with Hyundai contributing capital and expertise. CFS has raised $4 billion total, making it the best-funded private fusion company.

Samsung Electronics stock dropped 2.3% to ₩253,500 on Monday due to concerns over AI development slowdown, impacting semiconductor demand. A joint statement from AI labs, rising oil prices, and high U.S. Treasury yields contributed to the selloff. SK Hynix also fell, indicating sector-wide pressure. The KOSPI index declined over 3%.

The South Korean won's appreciation against the dollar has reduced earnings forecasts for Samsung Electronics and SK hynix. Their combined operating profit outlook dropped by 21 trillion won in two months, with brokerages lowering estimates. Both companies are monitoring currency impacts but expect long-term growth due to AI-driven demand.