Kospi Falls to Six-Month Low as Concerns Over AI Spending Grow

what happened

According to Dow Jones Newswires, South Korea's benchmark index, seen as a gauge of the artificial-intelligence trade, was heading for its weakest close since April as the AI selloff spread across Asia. The decline followed a sharp drop in US technology shares, as investors grew more worried about the huge borrowing-based spending needed to build AI infrastructure.

The Nasdaq Composite fell 2.6% on Thursday and the PHLX Semiconductor Index dropped 6.7%, both posting their biggest declines since June. The Kospi slid as much as 4.1% to 5305.98 on Friday before cutting losses to roughly 2% by midday. SK Hynix shares fell up to 4.2% in early Seoul trade and Samsung Electronics lost as much as 5.1%. The index is on course for its fourth straight weekly loss.

Investor appetite for AI-linked share sales has also cooled, stalling several fundraisings worth billions of dollars. SK Hynix, the world's second-largest memory-chip maker, dropped plans on Friday for a US listing of its unit Solidigm.

why it matters

The story shows how reliance on the AI theme has become a risk for the whole Asian chip sector. The Korean sell-off reflects price pressure on the largest chipmakers, while the scrapped Solidigm listing suggests the window for AI-related share sales may be narrowing.

market impact

Asian chip sector: AI spending worries weigh on Kospi, SK Hynix and Samsung Electronics

instruments