Tech in Asia reported that chip stocks in South Korea and Japan fell on October 19. DeepSeek, a Chinese AI startup, had released an updated model over the weekend and called it faster and leaner. The Kospi dropped as much as 3.2%. Samsung Electronics and SK hynix both slid more than 4% early, then regained some ground. Japan's Nikkei 225 lost about 2%.
Investors fear AI may need less memory, Tech in Asia said. General background, not from the article: AI programs keep their learned settings and working data in memory chips while they run, and Samsung and SK hynix make such chips. A model that needs less could mean fewer chips per system. The article gives no figures for this model and does not say what leaner means. The fear holds only if tests confirm the savings and total demand falls.
The selloff was already under way. Tech in Asia says US chip stocks fell eight sessions in a row through October 16 over AI infrastructure costs. Kang DaeKwun of Life Asset Management blamed doubts over funding for US AI projects. Markets are questioning whether AI always needs more hardware. Buyers can ask: do our AI contracts assume rising hardware use? What happens to our commitments if a cheaper model does the job?