South Korea's KOSPI index experienced a dramatic plunge of nearly 9% on Thursday, closing at 5,483.65, and triggering a circuit breaker. The steep decline was driven by a selloff in technology stocks, particularly amid growing concerns over competition from Chinese memory chipmakers.
This marked the 10th time this year that a circuit breaker was activated on the KOSPI, with the index reaching its lowest point in nearly three months. The selloff was exacerbated by hotter-than-expected U. S. inflation figures, which have heightened expectations for further interest rate hikes by the Federal Reserve.
Among the hardest-hit stocks were Samsung Electronics and SK Hynix, which fell 10.6% and 11.4%, respectively. These declines were fueled by fears that Chinese firms, such as ChangXin Memory Technologies (CXMT), are making significant strides in developing higher-density DRAM designs, potentially threatening South Korean market dominance.
The impact of the selloff was felt across the Asian markets. Japan's Nikkei 225 dropped 5%, while Hong Kong's Hang Seng and China's CSI 300 fell 1.3% and 1.5%, respectively. The broader MSCI Asia Pacific index declined nearly 3%, setting it on track for its weakest level since July.
In the U. S., the tech-heavy Nasdaq Composite had already set the tone with a 1.9% drop overnight. The Philadelphia Semiconductor Index extended its losing streak to six sessions, its longest since May 2025. Meanwhile, the Russell 2000 Equal Weight slipped into correction territory, having fallen 11% from its peak.
Despite the tech rout, TSMC reported a sixth consecutive quarter of record earnings, with a 68.7% year-on-year increase in third-quarter net profit to T$763.06 billion ($23.6 billion). However, even these strong results could not prevent the company's shares from falling 2.2% in Taiwan trade.
Chipmakers Lead Losses
Chipmakers were at the forefront of the market downturn. In addition to SK Hynix and Samsung, Japan's Kioxia saw a 12.2% drop, and South Korea's LG Innotek fell 10%. Taiwan's Largan and Foxconn also experienced declines of 3.5% and 2.5%, respectively.
Adding to the market's woes, Broadcom CEO Hock Tan issued a warning about the speculative nature of some AI investments, suggesting that investors may be gambling on valuations that are not supported by returns. This cautionary note has further fueled concerns about the sustainability of heavy infrastructure spending in the AI sector.
As the markets continue to react to these developments, investors remain on edge, closely watching for any signs of stabilization or further volatility in the tech sector.
