South Korea's KOSPI index suffered its worst single-day drop of 2025, plunging over 8% and triggering a trading halt. The rout was led by semiconductor heavyweights Samsung Electronics and SK Hynix, both falling more than 10%.
The sell-off was triggered by a shift in AI market sentiment. A recent earnings report from Broadcom showed strong growth but failed to exceed expectations, leading investors to question the pace of AI hardware demand. This sparked a wave of selling that began in U.S. markets and spread globally.
Foreign investors dumped more than $2.6 billion worth of KOSPI shares. The sharp decline follows a record-breaking rally that had pushed the index to all-time highs, fueled entirely by bets on AI infrastructure spending.
The move signals a broader market reassessment of whether AI hardware demand can sustain the growth rates required by current stock valuations. The decline challenges the recent supremacy of SK Hynix, which had just become Korea's most valuable company on the strength of its AI memory chips.
Investors are now watching for upcoming earnings reports from other chipmakers for further direction.