Chip stocks slide across the United States and Asia as a sell-off in artificial intelligence shares deepened, rattling markets from New York to Seoul. The latest move came as investors grew more uneasy about the price tag of the AI boom and whether the spending will pay off.
In South Korea, trading on the benchmark Kospi was paused temporarily on Tuesday morning after the index fell 8%. When the 20-minute halt ended, losses widened and the market closed 10.8% lower. Technology firms led the decline, with Samsung Electronics and SK Hynix each dropping by more than 13%. The shock in the Kospi showed how quickly the market can swing when confidence breaks.
The slide followed a rough session for Nvidia, the AI chip leader, which fell 5% in New York on Monday. That drop pushed Nvidia off the top spot as the world’s most valuable listed company, allowing Apple to move ahead. The shift matters because Nvidia has become the symbol of the AI trade, and its weakness has now spread beyond one stock into a wider question about valuations across the sector.
South Korea’s market has seen this kind of turbulence before. The Kospi has already been halted several times this year under circuit-breaker rules meant to slow panic selling. It had more than doubled from the start of the year to mid-June, only to give back about a third of that gain since then. The sharp rise and retreat underline how much of the market’s recent momentum was tied to a narrow group of technology names.
Market watchers say the concentration is part of the problem. Jane Sydenham, investment director at Rathbones, said the Asian decline followed “phenomenal rises” over the past few months. She said the Korean market is heavily concentrated, with major money flowing into Samsung and SK Hynix, both of which fell sharply. She also pointed to borrowed money as a factor, saying some Korean investors buy stocks with debt, which can make corrections more severe.
