South Korea’s Kospi Plunges 8% As AI Stock Selloff Hits Chipmakers

South Korea’s benchmark Kospi index witnessed a sharp decline on Tuesday, falling more than 8 percent as renewed selling pressure hit technology stocks, particularly companies linked to the artificial intelligence (AI) boom.

The Kospi dropped 8.18 percent to 7,392.04 in Seoul, dragged down by steep losses in major chipmakers Samsung Electronics and SK Hynix.

The decline reflected growing investor concerns that the recent rally in AI-related stocks may have pushed valuations beyond their underlying business fundamentals.

The broader technology selloff extended across global markets. The MSCI Asia Pacific Index declined 1.7 percent, while Nasdaq 100 futures fell about 1 percent, suggesting that the recovery seen on Wall Street in the previous session was losing momentum. European markets were also expected to open weaker.

Samsung Electronics shares fell 9.3 percent despite the company reporting a 19-fold increase in profits.

The stock had gained more than 100 percent this year before the latest decline, making it vulnerable to profit-taking amid broader concerns over AI-related valuations.

SK Hynix also declined 9.5 percent after beginning the marketing process for its planned US listing.

The company is expected to test investor appetite for AI-related investments as it aims to raise around $28 billion through a share sale for its proposed Nasdaq listing.

Investors have become increasingly cautious about whether massive spending on AI infrastructure, including advanced chips and data centres, will translate into sufficient productivity gains and corporate profits. The concerns have triggered volatility across several AI-focused companies globally.

Other Asian markets also traded lower. Japan’s Nikkei 225 declined 1.8 percent to 68,493.52, with chip equipment maker Tokyo Electron falling 3.4 percent and Kioxia Holdings dropping 10.7 percent.

Hong Kong’s Hang Seng index slipped 0.4 percent to 23,517.70, while China’s Shanghai Composite Index declined 1 percent to 3,999.03. Taiwan’s Taiex also fell 1.8 percent amid weakness in technology stocks.

The decline came after US markets ended higher on Monday. The S&P 500 gained 0.7 percent to close at 7,537.54, moving closer to its record high despite a majority of its constituent stocks finishing lower.

Market participants are now closely watching whether the AI-driven rally can sustain momentum amid rising questions over valuations and long-term returns from technology investments.