TLDR
- Google introduced TurboQuant, a breakthrough algorithm capable of slashing AI memory needs by up to 6x
- SK Hynix plummeted 6.23% while Samsung declined 4.8% following the announcement
- American memory chipmakers including Micron, SanDisk, and Western Digital dropped between 1.6% and 3.5%
- Industry experts characterize the downturn as temporary profit-taking rather than fundamental demand erosion
- TurboQuant will be formally presented by Google at April’s ICLR 2026 conference
Shares of major memory chip manufacturers Samsung and SK Hynix experienced significant declines Thursday following Google’s introduction of TurboQuant, a novel AI memory compression technology.
SK Hynix witnessed a 6.23% decline while Samsung slid 4.8% during trading on the Korea Exchange. The two stocks ranked among the heaviest weights dragging down the KOSPI index, which plunged as much as 3% during the session.
The electrical and electronics sector benchmark likewise retreated 4.76%, settling at 3,592.22.
The Korean stock decline mirrored previous losses among American memory manufacturers. Micron Technology fell 3.40%, SanDisk declined 3.50%, and Western Digital shed 1.63% on the New York Stock Exchange.
Google’s research team revealed TurboQuant earlier in the week. The innovative algorithm enables AI systems to manage up to six times greater capacity while utilizing identical memory resources.
According to Google, the breakthrough also enhances vector search functionality that underpins leading search platforms.
Market participants worried that diminished memory requirements might curtail demand for the cutting-edge memory chips that Samsung and SK Hynix deliver to data center operators.
Both manufacturers have reaped substantial rewards from AI-fueled demand. This surge had been anticipated to generate memory chip supply constraints in recent periods and propelled significant stock price appreciation for both companies.
Analysts Challenge Pessimistic Interpretation
Most financial institutions interpret the decline as temporary profit-taking. Market analysts contend the innovation may actually bolster memory demand in the long run.
Surim Lee, equity research analyst at DS Investment & Securities, emphasized that technologies reducing memory consumption historically expand aggregate demand rather than contract it. Lee highlighted that TurboQuant emerged precisely because memory constraints in AI infrastructure had already reached critical thresholds.
Lee further explained that efficiency improvements create a reinforcing cycle whereby cost reductions drive increased utilization and capital reinvestment, rather than diminishing overall demand.
Han Ji-young of Kiwoom Securities observed that as AI systems gain efficiency and capability, paradoxically, aggregate AI demand could intensify.
Han also suggested the pronounced stock decline likely reflected investor exhaustion following the early-year memory pricing surge, with TurboQuant news providing justification for profit realization.
Historical Trends Reinforce Long-Term Outlook
Historically, innovations enhancing resource efficiency have frequently accelerated industry expansion and elevated total demand, contrary to reducing it.
Heo Jae-hwan of Eugene Investment & Securities indicated that server and semiconductor segments connected to AI, where supply already faces constraints, will likely demonstrate greater resilience compared to alternative sectors.
Google confirmed it will officially unveil TurboQuant at the ICLR 2026 conference scheduled for April.
Samsung and SK Hynix concluded trading at 1,801,000 won and 9,330,000 won respectively on the Korea Exchange on March 26.
