South Korean Kospi slides 7% as AI-related chip stocks tumble
The Kospi fell nearly 7% on Wednesday, driven by sharp declines in SK Hynix and Samsung Electronics after weaker-than-expected earnings and growing doubts about AI investment spending.
South Korea's benchmark Kospi index dropped about 7% on Wednesday, with the index at 5,616.76 by mid-afternoon, after investors sold off shares of major chipmakers. SK Hynix fell 12.8% following a quarterly operating profit that missed analysts' forecasts, despite a six-fold rise to a record 60.5 trillion won. Samsung Electronics also declined, down 7.7%.
The sell-off reflects broader concerns about large AI-related capital spending, compounded by developments such as China’s progress on cheaper advanced AI models. In Japan, the Nikkei 225 slipped 1.7% as chip-equipment maker Tokyo Electron dropped 10.1% and Lasertec Corp. fell 8.2%. Taiwan’s Taiex lost 3.8%, while the Shanghai Composite slipped 0.5%.
Hong Kong’s Hang Seng index rose 1.7% and Australia’s S&P/ASX 200 gained 1%, diverging from the regional downward trend. Oil prices rebounded, with Brent crude up 3.1% to $84.58 a barrel and U.S. crude rising 3.6% to $82.14, after a brief pause in hostilities in the Strait of Hormuz was broken by missile activity.
In the United States, the S&P 500 edged up 0.2% and the Dow Jones Industrial Average rose 1%, while the Nasdaq slipped 0.2%. Chip-related stocks such as Micron Technology, Advanced Micro Devices and Applied Materials fell between 7% and 9% amid heightened earnings expectations.
The U.S. dollar weakened slightly against the Japanese yen, trading at 163.57 yen per dollar.