TLDR
- Google unveiled TurboQuant, an algorithm that can reduce AI memory requirements by up to six times
- Samsung fell 4.8% and SK Hynix dropped 6.23% on the news
- U.S. memory stocks Micron, SanDisk, and Western Digital also fell between 1.6% and 3.5%
- Analysts say the sell-off is short-term profit-taking, not a sign of long-term demand decline
- Google will present TurboQuant at the ICLR 2026 conference in April
Samsung and SK Hynix shares fell sharply on Thursday after Google researchers unveiled a new AI memory compression algorithm called TurboQuant.
Samsung dropped 4.8% and SK Hynix fell 6.23% on the Korea Exchange. Both stocks were among the biggest drags on the KOSPI index, which shed as much as 3% on the day.
The electrical and electronics sector index also fell 4.76%, closing at 3,592.22.
The sell-off followed overnight losses in U.S. memory stocks. Micron Technology dropped 3.40%, SanDisk lost 3.50%, and Western Digital slipped 1.63% on the New York Stock Exchange.
Google researchers unveiled TurboQuant earlier this week. The algorithm can allow AI models to handle up to six times more capacity using the same memory resources.
The technology can also optimize vector search capabilities that power major search engines, according to Google.
Investors grew concerned that lower memory requirements could reduce demand for the advanced memory chips that Samsung and SK Hynix supply to data centers.
Both companies have benefited heavily from AI-driven demand. That demand had been seen causing a memory chip supply shortage in recent quarters and fueled major rallies in both stocks.
Analysts Push Back on Bearish Read
Most brokerages view the drop as short-term profit-taking. Analysts argue the technology could actually support memory demand over time.
Surim Lee, equity research analyst at DS Investment & Securities, said technologies that reduce memory usage tend to expand total demand rather than cut it. He pointed out that TurboQuant emerged because memory bottlenecks in AI infrastructure had already reached a critical level.
Lee added that efficiency gains create a cycle where cost savings lead to higher usage and reinvestment, not lower overall demand.
Han Ji-young of Kiwoom Securities noted that as AI models become more efficient and powerful, overall AI demand could paradoxically increase.
Han also said the sharp stock drop likely reflected investor fatigue after the early-year memory price rally, with the TurboQuant news serving as a reason to lock in profits.
Historical Patterns Support Long-Term View
Historically, new technologies that improve resource efficiency have often led to faster industry growth and higher total demand, not less.
Heo Jae-hwan of Eugene Investment & Securities said server and semiconductor segments tied to AI, where supply is already tight, are likely to hold up better than other industries.
Google said it will formally present TurboQuant at the ICLR 2026 conference in April.
Samsung and SK Hynix closed at 1,801,000 won and 9,330,000 won respectively on the Korea Exchange on March 26.
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