South Korea's Kospi index drops more than 7% amid tech share sell-off

South Korea’s benchmark Kospi index dropped more than 7% on Tuesday, driven by a sell-off in chip shares. The decline occurred as Asian shares mostly declined following a mixed close for U.S. stocks.

Market Performance

The Kospi index ended the day down 7.4% to 5,914.35, marking its lowest level since late July. The index had previously reached an all-time high in June after crossing 9,000, a rise attributed to the global artificial intelligence boom.

Semiconductor Sector Decline

Major technology companies in South Korea saw significant losses during the sell-off. Samsung Electronics fell 7.7%, while memory chipmaker SK Hynix plunged 8.8%.

The negative trend extended to other Asian markets. Japan’s Nikkei 225 dropped 2.5% to 67,292.39. Within the Japanese market, chip equipment maker Tokyo Electron fell 6.6%, and SoftBank Group, an investor in OpenAI, lost 8%.

Why it matters

The Kospi index had recently achieved record highs, surpassing 9,000 in June, fueled by the global artificial intelligence boom. The recent drop to 5,914.35 represents a significant reversal from those peak levels, with major semiconductor manufacturers like Samsung Electronics and SK Hynix leading the decline.

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Sources

• thestar.com: South Korea’s benchmark Kospi index sinks more than 7% as a sell-off of technology shares deepens
• wboc.com: South Korea's Kospi index sinks more than 7% on semiconductor share sell-off over AI boom worries | International | wboc.com

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.