The domestic stock market, which has rapidly grown around Samsung Electronics and SK Hynix, is facing threats from global uncertainties in AI investment funding and the technological advancements of Chinese memory companies.
On October 14, local time, shares of the U.S. AI cloud company CoreWeave plummeted by 15.5%, while the yield on its 9.625% bonds maturing in 2032 soared to 14.8%, and the yield on its 9.75% bonds maturing in 2031 reached approximately 14.9%. CoreWeave's S&P credit rating is already at B+, indicating a speculative grade.
This company has raised over $35 billion this year through chip-backed loans, high-yield bonds, convertible bonds, and equity offerings. As of the end of the second quarter, its debt stood at $72 billion, more than 14 times its equity of $5 billion, with a quarterly net loss of $626 million and interest expenses of $640 million.
On the same day, Oracle and Nebius also saw their shares drop by nearly 7% and 9%, respectively. CoreWeave CEO Mike Intrater stated in an interview with Bloomberg that the company's backlog is sufficient to support its debt repayment obligations.
Companies like CoreWeave, which are heavily borrowing to purchase Nvidia's GPUs, are emerging as risk factors in the financial market.
The International Monetary Fund (IMF) identified the adjustment in the AI-related market as one of the risks that could lead to a sharp tightening. Nvidia is providing demand guarantees while selling GPUs to these companies. It has an agreement with CoreWeave to buy back unsold capacity up to a limit of $6.3 billion by 2032.
Nvidia's guarantee obligations are estimated to reach $108.5 billion. The credit concerns surrounding NeoCloud could potentially spread to Nvidia and the AI semiconductor supply chain. Although there are no signs of reduced orders for Samsung Electronics and SK Hynix, the market has begun to reflect the funding risks of their clients in stock prices.
Confusion surrounding AI company revenues has also shaken investor sentiment. According to the IT industry, OpenAI disclosed to investors that its annualized revenue for September was around $50 billion. The previously mentioned figure of $70 billion was based on a calculation that included sales through cloud partners, following Anthropic's method. The news of OpenAI's lower-than-expected revenue led to a decline in U.S. tech stocks.
Additionally, the presence of Changxin Memory Technologies (CXMT) is growing. According to Counterpoint Research, CXMT accounted for about 8% of global DRAM sales in the first quarter of this year. TrendForce reported that CXMT's sales of server DRAM have surpassed those for mobile for the first time. CXMT is also said to have signed a long-term supply contract for server memory worth over $7 billion with ByteDance in July.
Nvidia's position in China is weakening. According to IDC data cited by Reuters, Nvidia's shipments of AI chips for Chinese data centers fell by 44% year-on-year to 678,000 units in the first half of this year, with its market share dropping to 34%. During the same period, Huawei's share rose to 28%. The ongoing U.S. export restrictions on advanced chips have limited the approval of even some allowed chip sales by Chinese authorities.
Domestic and international conditions are adversely affecting the domestic semiconductor industry, leading to a continuous decline in the stock prices of Samsung Electronics and SK Hynix, which accounted for 58.9% of the KOSPI market capitalization as of June. Eroding confidence in the supply and demand dynamics of these stocks and the AI investment cycle is contributing to overall market volatility.
* This article has been translated by AI.
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