Qualcomm's Phone Revenue Fell 26%; SK Hynix Dropped 9.5% in Seoul

Korea's stock market hit the brakes an hour after Thursday's open. At 10:16 a.m. local time, Kospi 200 futures stayed more than 5% lower for a full minute, and program sell orders were suspended for five minutes.

It was the 56th time the brake had triggered this year, and it did not stop the selling. The Kospi closed down 5.28% at 5,383.80 after falling as much as 6.1% intraday. The Kosdaq triggered the same brake in the afternoon and lost 5.11%.

Foreign investors did the selling. According to Topstar News, they were net sellers of ₩3.39 trillion, about $2.5 billion at roughly 1,344 won per dollar. Retail investors stood on the other side with ₩2.27 trillion of net buying.

On Wall Street, the Spenders Rose and the Suppliers Fell

The chain started in New York on November 4. The S&P 500 rose 1.6% in its best day since August, according to the Boston Globe. The Philadelphia semiconductor index fell more than 3% to a six-month low.

Amazon and Microsoft rose between 5% and 7% depending on the source, while Micron lost 7% and Nvidia 3.2%. Mike Bell of RBC Global Asset Management summed it up. "There's a clear rotation going on out of semis and energy stocks and into hyperscalers."

The trigger was the expectation that data center construction could slow after Democrats won Congress and the Texas governorship. The Boston Globe framed it as a scenario that would reassure investors in the companies doing the spending.

The Same Dollar on Two Income Statements

The market read the election in Washington as a spending brake. In Seoul, it read the same brake as lost orders.

A memory maker's costs are mostly fabs and machines, so a small revenue drop is magnified in profit. That is why a spending headline produces a gain of a few points at a cloud company and a near double-digit drop at SK Hynix.

Qualcomm Showed the Other Side of the Memory Bill

The second link came the same evening. Qualcomm said phone-chip revenue fell 26% year over year to $5.14 billion, below expectations.

Global smartphone shipments fell 20% in the September quarter to a 14-year low, according to Counterpoint data cited by Reuters. The cause is memory made expensive by AI demand, which has pushed up phone prices. At Qualcomm, Apple's switch to its own modem added to the decline.

The stock fell 7.4% after hours, per our earnings analysis. Arm said royalty revenue grew only 8% to $670 million, and its CFO said memory price increases are weighing on low- and mid-range phones.

In Tokyo, Advantest fell 14.7%, Kioxia more than 13% and SoftBank 7%, according to Investing.com. A memory maker's pricing power is coming back as lost demand at its customers' customers.

The Part That Does Not Fit

Qualcomm CEO Cristiano Amon said the problem is not demand. "We don't have a demand issue; it's a supply issue." The company's December-quarter data center guidance of $650 million beat the $539 million expected.

Needham and Stratechery's Ben Thompson argue new restrictions would make compute scarcer and raise the value of existing data centers. There is no binding tool yet: Texas's new governor takes office in January 2027, and any bill from Congress still needs Trump's signature.

The selloff is the price of a possibility, not of a decision. More: What Is Sector Rotation?

What It Means for Investors

• The market priced slower data center spending as good for big cloud companies and bad for suppliers, though no restriction is in force yet.
• Micron, SanDisk and Nvidia hinge on spending headlines, while Qualcomm and Arm hinge on phone volumes; memory price hikes hit the two groups in opposite ways.
• SoftBank's results on November 10 and Texas's first executive orders in January 2027 will show whether the possibility becomes a decision.
• The risk to this thesis is big cloud companies raising, rather than cutting, their spending plans at the next earnings.

This story is based on Reuters' Qualcomm report, Investing.com's Asia market wrap, and Seoul close and sidecar data from Topstar News and Digital Daily. Wall Street moves come from the Boston Globe, SiliconANGLE and the Motley Fool; Microsoft and Amazon closing percentages differ across sources, so a range is given. Arm figures rely on a BigGo Finance report, and the SoftBank date on the company's notice. The won-dollar conversion uses the November 2 rate.