Global chip stocks faced a sharp decline on Tuesday, triggered in part by comments from Broadcom CEO Hock Tan, who likened the current fervor surrounding AI investment to a “casino.” The remarks contributed to a broader cooling of investor sentiment toward the semiconductor sector, which has been a primary driver of market growth over the past year.

The impact was most pronounced in Asian markets. The South Korean Kospi index saw a notable drop of 6.25%, driven by heavy losses in major domestic firms. Samsung Electronics shares fell by 7.4%, while SK Hynix saw a steeper decline of 10%. Other regional markets also struggled, with Japan’s Nikkei index falling 1.8% and Taiwan’s exchange losing nearly 2%, including a comparable drop for the major manufacturer TSMC.

Beyond the CEO's comments, market analysts noted that the sector is also reacting to competitive developments. Chinese memory chip maker CXMT announced progress on a new chip architecture, which may be influencing investor perceptions regarding future market share and supply chain dynamics. While the Broadcom CEO's comments served as a catalyst for the day's volatility, the sell-off reflects a wider reassessment of the high valuations currently assigned to AI-related technology companies.