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.
Market Selloff Details
The benchmark index fell more than 8% 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.
The weakness spread across the region, with Japan's Nikkei 225 falling 1.5% as chip equipment maker Tokyo Electron slumped 10.6% and Lasertec Corp. dropped 8.3%. Taiwan's Taiex also declined 3.8%. Broader Asian markets were mixed: Hong Kong's Hang Seng gained 1.8%, China's Shanghai Composite rose 0.4%, 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% higher.
| Market | Index | Change |
|---|---|---|
| South Korea | Kospi | -6.0% (close 5,663.24) |
| Japan | Nikkei 225 | -1.5% |
| Taiwan | Taiex | -3.8% |
| Hong Kong | Hang Seng | +1.8% |
| China | Shanghai Composite | +0.4% |
| Australia | S&P/ASX 200 | +1.0% |
| India | Sensex | +1.1% |
On Wall Street overnight, the tech-heavy Nasdaq Composite slipped 0.2% as AI-related stocks remained under pressure. Micron Technology fell 8.9%, while Advanced Micro Devices and Applied Materials dropped 8.1% and 7.8%, respectively, reflecting continued investor caution toward semiconductor stocks despite generally strong corporate earnings.
Chipmakers Under Pressure
Shares of memory chip giant SK Hynix tumbled 9.4% after its operating profit for the latest quarter fell short of market forecasts. Samsung Electronics also lost 4.8%, 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.
Broader Concerns on AI Spending
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.
Implications for Trade and Investment
For CFOs and treasury directors tracking trade-affected markets, the sharp decline in South Korea's benchmark index signals heightened equity market risk that could affect the cost of capital for Korean semiconductor exporters. The 6% drop in the Kospi and the 9.4% plunge in SK Hynix highlight the vulnerability of the country's export-driven economy to shifts in global AI sentiment. Finance executives should monitor further volatility in semiconductor stocks, as continued selling may pressure trade finance costs and FX exposure for firms reliant on chip exports.
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