Investor worries over AI capital expenditure sustainability drove sharp losses in Asian semiconductor shares, triggering a circuit breaker in Korea.
Asian tech stocks plunged as concerns over AI-related spending weighed on chipmakers, dragging Japan’s Nikkei down 2% and forcing a circuit breaker on Korea’s KOSPI. Heavyweights SoftBank Group, Tokyo Electron, and Advantest led declines, alongside Samsung Electronics and SK Hynix, mirroring overnight weakness in US-listed peers like AMD and SpaceX.
The selloff remained concentrated in AI and semiconductor-exposed names, with Japan’s broader Topix index falling just 0.4%. Lower crude oil prices, linked to Middle East peace hopes, provided some support to non-tech sectors. Korea’s market stress, however, signals elevated volatility ahead for regional chip stocks.
Fitch noted that Korea’s equity volatility poses limited near-term credit risk, though the sharp declines highlight sector-specific pressures rather than broader market deterioration.