The Kospi stock market extended its sharp decline on Wednesday as investors continued selling semiconductor and artificial intelligence-related companies in Asia.
South Korea’s benchmark Kospi index fell more than 9% during the session, and reached its lowest level since April. The decline followed a 10.84% plunge on Tuesday, when the index closed at 6,023.66 after recording its steepest one-day loss in nearly five months.
KOSPI price movements over the past day (Source: Google Finance)
Semiconductor heavyweights were once again responsible for much of the pressure on the Kospi stock index.
SK Hynix Leads Kospi Stock Decline
SK Hynix shares dropped more than 9% after the memory chip manufacturer reported record quarterly revenue and profit but failed to meet analysts’ elevated expectations.
The company reportedly generated quarterly operating profit of approximately 60.5 trillion won, which was an increase of more than 550% from the previous year. However, the result fell short of analysts’ expectations of roughly 64 trillion won.
Samsung Electronics declined more than 8%, while other South Korean technology companies also suffered steep losses. LG Innotek fell around 15% and Seoul Semiconductor dropped approximately 10%.
The selling followed Tuesday’s market rout, during which the Kospi fell 10.84%, SK Hynix lost 14.7% and Samsung Electronics declined 14.4%. Foreign investors sold approximately 5 trillion won of South Korean shares during that session.
Asian Chip Stocks Follow Kospi Lower
The downturn spread across other Asian markets. Japanese memory manufacturer Kioxia fell around 14%, while Tokyo Electron dropped 5%. SoftBank Group, which provides investors with exposure to the AI sector through its stake in Arm, lost nearly 8%.
SoftBank Group share price (Source: Google Finance)
Taiwan Semiconductor Manufacturing Company declined approximately 3.9%, while the Hang Seng China Semiconductor Chips Index fell more than 6%. Mainland China’s technology-focused ChiNext 300 index slipped 0.63%.
The weakness followed another difficult session for US semiconductor stocks. AMD closed 8.12% lower at $454.62, while Micron Technology dropped 8.95% to $820.53.
Investors are concerned about the enormous amounts being invested in AI infrastructure, the use of debt and financing arrangements to support data-center construction, and rising competition from Chinese semiconductor companies.
However, some analysts believe the latest Kospi stock decline is a correction after excessive gains rather than a collapse in demand.
