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South Korean stocks were hammered on Friday, with the benchmark Kospi plunging as much as 8.2 per cent and briefly halting trading after a 20-minute circuit breaker was triggered, as a global sell-off in technology shares and renewed anxiety over the cost of the artificial intelligence (AI) boom sent investors rushing for the exits.
The latest rout came only days after South Korea’s market was thrown into chaos on Tuesday, when the Kospi fell nearly 10 per cent and trading was halted before the index staged a sharp recovery.
AI sell-off ripples through Asian markets
Asian equities retreated after a strong quarter, with investors booking profits in chip and big-tech names. The weakness followed Apple’s decision to raise prices on iPads and MacBooks to offset surging memory and storage chip costs, a move that wiped about $250 billion off its market value and highlighted the downside of booming chip demand.
Microsoft also raised Xbox prices globally, while Nasdaq futures fell 1.7 per cent in Asia after a media report said OpenAI may delay its public debut until next year.
The market was on track for its biggest weekly decline in more than three months after overnight losses on Wall Street revived concerns over the sustainability of AI spending and the prospect of US interest rates staying higher for longer. Strong demand signals from Micron Technology and Qualcomm were not enough to offset those worries.
Chipmakers lead the Kospi rout
Shares of Samsung Electronics and SK Hynix, South Korea’s two biggest chipmakers, fell more than 9 per cent at one point. Foreign investors sold Kospi-listed shares worth about 2.6 trillion won ($1.68 billion) during the session.
By midday, Samsung Electronics was down 6.69 per cent and SK Hynix had fallen 7.03 per cent. Battery maker LG Energy Solution lost 5.11 per cent.
Other major stocks also came under pressure. Hyundai Motor fell 4.77 per cent, Kia Corp dropped 4.30 per cent, POSCO Holdings shed 5.73 per cent and Samsung Biologics slipped 3.10 per cent.
Market breadth was weak, with only 111 of the 915 traded stocks advancing while 792 declined.
The Kospi was down 9.4 per cent for the week, but still up a massive 62 per cent for the quarter, reflecting how sharply the market had rallied before Friday’s reversal. Broader regional markets also weakened, with MSCI’s broadest index of Asia-Pacific shares outside Japan falling 3.8 per cent and on track for a weekly loss of 5.4 per cent. Japan’s Nikkei slumped 5 per cent, while Chinese blue chips and Hong Kong’s Hang Seng lost 2.9 per cent and 2.4 per cent, respectively.
Samsung investment plans fail to calm investors
The sell-off came despite reports that Samsung Group plans to announce a 1,000 trillion won ($645.87 billion) investment in South Korea over the next 10 years, including a possible 300 trillion won for chip factories in the southwest.
Investors, however, remained focused on near-term concerns over AI spending, rising input costs and the outlook for memory-chip demand, with analysts warning that month-end and quarter-end rebalancing flows may also have amplified the volatility in big tech stocks.
For now, South Korea’s dramatic trading day is a reminder that the AI trade is entering a tougher phase — one where earnings, borrowing costs and investor confidence may matter just as much as the technology itself.
