South Korea’s Kospi tumbles 6% as SK Hynix slide, AI spending worries trigger chip selloff
South Korea’s benchmark Kospi index plunged 6% on Wednesday, dragged down by a sharp selloff in chipmakers after SK Hynix reported quarterly earnings that, despite surging nearly sixfold from a year ago, missed analysts’ expectations.The benchmark index had fallen more than 8 per cent during intraday trade before recovering some losses to close at 5,663.24, its lowest level since early April. The decline came just days after the Kospi had climbed above the 9,000 mark.Shares of memory chip giant SK Hynix tumbled 9.4 per cent after its operating profit for the latest quarter fell short of market forecasts. Samsung Electronics also lost 4.8 per cent, adding to pressure on the index.The selloff reflects renewed investor concerns over lofty valuations of artificial intelligence-linked stocks, particularly semiconductor companies that have been among the biggest beneficiaries of the AI boom.Markets have been hit by repeated bouts of profit-taking in AI-related shares amid growing doubts over whether massive investments in artificial intelligence will generate the expected returns. Investor sentiment has also been dented by China’s progress in developing lower-cost advanced AI models, raising concerns over future demand and profitability for premium chipmakers.The weakness spread across the region, with Japan’s Nikkei 225 falling 1.5 per cent as chip equipment maker Tokyo Electron slumped 10.6 per cent and Lasertec Corp. dropped 8.3 per cent. Taiwan’s Taiex also declined 3.8 per cent.Broader Asian markets were mixed. Hong Kong’s Hang Seng gained 1.8 per cent, while China’s Shanghai Composite rose 0.4 per cent. Australia’s S&P/ASX 200 advanced 1% after inflation data eased concerns over further interest-rate hikes, and India’s Sensex traded 1.1 per cent higher.On Wall Street overnight, the tech-heavy Nasdaq Composite slipped 0.2 per cent as AI-related stocks remained under pressure. Micron Technology fell 8.9 per cent, while Advanced Micro Devices and Applied Materials dropped 8.1 per cent and 7.8 per cent, respectively, reflecting continued investor caution toward semiconductor stocks despite generally strong corporate earnings.
