Shares in Samsung Electronics and SK Hynix fell sharply on Thursday after Google researchers unveiled a new compression algorithm that could reduce artificial intelligence's demand for memory.
Samsung (KS:005930) fell 4.8%, while SK Hynix Inc (KS:000660) declined 5.9%, with both stocks being among the biggest negative weights on the KOSPI index, which lost as much as 3%.
Losses in Asian memory stocks followed overnight declines in their U.S. counterparts, with Micron Technology (NASDAQ:MU), SanDisk Corporation (NASDAQ:SNDK), Western Digital (NASDAQ:WDC) and Seagate Technology PLC (NASDAQ:STX) all falling between 3% and 6%.
Researchers from Google unveiled TurboQuant earlier this week, which they said is an algorithm that can reduce the working memory requirements of artificial intelligence without impacting performance.
Google researchers said the technology is also capable of improving the vector search capabilities that power major search engines.
Lower memory requirements for artificial intelligence, especially if the technology is viable and widely adopted, could indicate a slowdown in industry demand for advanced memory chips.
AI-driven demand, which had been seen as causing a shortage of memory chips in recent quarters, fueled a significant rise in the shares of Samsung and SK Hynix. The two companies are among the world's largest and most advanced memory chip manufacturers and are key suppliers of memory to the AI industry.
Google said it will present Turboquant at the ICLR 2026 conference in April.
