South Korean Kospi Plunges 7% Amid AI Chip Selloff
South Korea's Kospi index dropped over 7% as investors sold off AI chip stocks amid concerns over capital constraints and Chinese competition.
Samsung Electronics and SK Hynix led a sharp decline in South Korea's benchmark Kospi index on Tuesday, which plunged more than 7% to its lowest level since July 31. Samsung Electronics shares fell 9% and SK Hynix dropped 10% by midday, mirroring a broader downturn across Asia. Japan's Nikkei and Taiwan's Taiex both fell approximately 3% following a weak session for semiconductor stocks in the United States.
Investors are reacting to growing uncertainty regarding the financing of AI infrastructure and intensifying competition from China. The Chinese memory-chip maker ChangXin Memory Technologies recently announced progress in data-packing technology and plans to launch a new server-memory product by the end of the year.
Adding to the market volatility, Broadcom CEO Hock Tan warned that the primary constraint on AI industry growth may shift from hardware or electricity to capital availability.
