South Korea’s stock market suffered its steepest падение of the year on Monday, as the KOSPI index dropped nearly 9% خلال intraday trading, triggering a circuit breaker amid a sharp selloff in semiconductor shares. Samsung Electronics fell 8.51% while SK Hynix lost 7.29%, leading the broader decline and intensifying concerns that the artificial intelligence (AI) rally may be cooling.
The selloff followed a global retreat in chip stocks late last week, when the Philadelphia Semiconductor Index plunged 10.26% in one of its worst single-day performances in years. Shares of Broadcom, Micron Technology, and other AI-linked companies also declined, prompting traders to reassess exposure to highly valued technology names.
Nvidia visit contrasts with market turmoil
Despite the sharp падение in Seoul’s الأسواق, developments over the weekend highlighted continued momentum in the AI industry. Nvidia Chief Executive Jensen Huang met SK Group Chairman Chey Tae-won and announced a multi-year partnership with SK Hynix to develop next-generation AI memory for data centers.
Huang also held discussions with Samsung Electronics, LG, and NAVER on expanding AI infrastructure. The visit came as local equities faced heavy liquidation pressure, underscoring a stark gap between falling share prices and ongoing supply-chain commitments.
AI trade shift drives volatility
The divergence between market performance and industry activity has fueled debate over whether the pullback signals weakening AI demand or simply a broad deleveraging after months of concentrated positioning.
Over the past year, South Korea’s market has been heavily driven by AI-related momentum, particularly demand for high bandwidth memory (HBM) and data center expansion. This made the country a key destination for global capital seeking exposure to the AI supply chain.
As global traders began reducing AI positions, Seoul became a primary market for unwinding those trades due to the heavy weighting of Samsung and SK Hynix in the KOSPI. The latest halt marked the ninth in the index’s history, highlighting the scale of the selloff.
Focus turns to earnings and supply chain strength
Attention in capital markets is now shifting from broad AI optimism to a closer examination of profitability across the supply chain. Traders are increasingly focused on which segments—from chip design and advanced packaging to cloud spending—can sustain margins.
Industry data indicates SK Hynix leads the HBM segment, a crucial component in AI servers, while Samsung continues to expand in memory and packaging. Both companies have reportedly passed Nvidia’s quality tests for HBM4, expected to be used in the upcoming Vera Rubin platform.
Key signals ahead for market direction
Near-term direction will depend largely on cloud spending trends and Nvidia’s order flow, which remain central drivers of Korea’s chip demand. Elevated retail margin debt, estimated at 37.74 trillion won, has added to market sensitivity and amplified selling pressure.
For now, markets and industry signals remain out of sync. While equities in Seoul have posted their sharpest declines in years, major technology companies continue to advance long-term AI investment plans. Greater clarity is expected in the coming weeks as new data on memory supply and cloud expenditure emerges.
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