South Korea’s Kospi Plunges 11% as Chip Stocks Crash on China AI Competition Fears
TLDR
- South Korea’s Kospi index closed down 10.8% on Tuesday, its lowest level since April
- Samsung Electronics fell 13.4% and SK Hynix dropped 14.7% on heavy selling
- A report that China has begun mass producing homegrown chipmaking tools triggered the sell-off
- Chinese chipmaker CXMT debuted with a 466% jump before falling 4% the next day
- Analysts at Morningstar called the sell-off a “knee-jerk reaction” that was overdone
South Korea’s stock market took a heavy hit on Tuesday as fears over Chinese competition in the chip industry rattled investors across Asia.
The Kospi index closed 10.8% lower at 6,023.66, its weakest close since April. Trading was temporarily halted multiple times during the session due to the speed of the decline.
Samsung and SK Hynix Lead the Losses
Samsung Electronics fell 13.4% while SK Hynix dropped 14.7%. SK Hynix had only recently listed on Wall Street, pricing its IPO at $149 per share. On Monday, those U.S.-traded shares closed at $143, already below the IPO price.
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