Broadcom CEO says AI investment is like a "casino," leading to a sharp drop in chip stocks

On Tuesday, the global semiconductor sector faced a massive sell-off, with the decline intensifying. The trigger was Broadcom CEO Hock Tan stating that AI investments have a "casino-like" nature. He mentioned in Singapore on Monday that many investors do not even know what they are investing in and that investors have set extremely high expectations, only to find that it is just like being in a casino.

The world's two largest memory chip manufacturers, Samsung Electronics and SK Hynix, saw their stock prices plunge by 8.8% and 9.2% at one point during the morning session, dragging down South Korea's main stock index by 7%. The two companies account for about half of the weight in the Korea Composite Stock Price Index, and their stock prices have cumulatively dropped by about 15% over the past five days. The Taiwan Weighted Stock Index, dominated by chip stocks, fell by 2.5%, with TSMC down 2%; Micron Technology dropped nearly 4% overnight, and the Philadelphia Stock Exchange Semiconductor Index fell by 2.7%.