South Korea’s KOSPI Crashes Over 10% As Global Chip Selloff Hits AI Stocks

South Korea’s stock market witnessed a sharp decline on Tuesday as a global selloff in semiconductor shares severely impacted technology-heavy companies.

The benchmark KOSPI index fell 724.37 points, or 10.73%, to 6,031.38, triggering a temporary 20-minute trading halt due to the steep fall.

The biggest factor behind the market crash was the intensifying global decline in chip stocks amid concerns over the sustainability of the artificial intelligence (AI) investment boom.

Investors have started questioning whether the massive spending on AI infrastructure can continue at current levels, putting pressure on semiconductor companies that had benefited from the rally.

The latest selling pressure followed Nvidia’s announcement of more than $750 billion in AI infrastructure deals, which raised concerns among investors about increasing capital expenditure requirements.

Market participants began reassessing valuations of AI-linked semiconductor companies, turning previous optimism into caution.

Concerns over growing competition from China also added to market pressure. Investors became increasingly worried after reports suggested Chinese companies were making rapid progress in semiconductor manufacturing despite US restrictions.

Shares of ASML Holding declined after reports indicated that a Shanghai-based company had started producing immersion deep ultraviolet (DUV) lithography machines, potentially challenging the Dutch firm’s dominance in chip-making equipment.

The development triggered losses across global semiconductor equipment makers, including ASM International, Applied Materials and Lam Research.

Japanese chip equipment companies such as Nikon and Canon also faced heavy selling pressure, while ASML supplier Lasertec witnessed a sharp decline.

South Korea’s technology giants faced some of the biggest losses. Memory-chip makers Samsung Electronics and SK Hynix fell more than 12%, adding significant pressure to the KOSPI because the two companies account for over half of the index’s weight.

SK Hynix declined after its US-listed shares hit record lows, while Samsung Electronics also suffered a steep fall. Broader Asian markets, including Japan’s Nikkei 225 and Taiwan’s Taiex, also declined as investors reduced exposure to major AI beneficiaries.

The selloff highlights growing concerns over AI valuations, semiconductor competition and whether the recent technology rally can sustain its momentum.