Kospi Plunges 7.89% to 7,648.09 in Sharpest Single-Day Drop on Chip Sell-Off

Yonhap News Agency reported that South Korean stocks plunged nearly 8 percent Thursday, dragged down by a sharp sell-off in semiconductor shares as investor sentiment soured amid renewed concerns over excess AI capacity. The benchmark Kospi plunged 655.32 points, or 7.89 percent, to close at 7,648.09 after falling as low as 7,616.33. The Korea Exchange activated a sell-side sidecar around 9:07 a.m., halting program trading for five minutes after the Kospi 200 Futures index dropped 5 percent or more for at least one minute. Samsung Electronics shed 9.06 percent to 286,000 won, while SK Hynix tumbled 14.57 percent to 2.19 million won. SK Square sank 13.2 percent and Samsung Electro-Mechanics retreated 12.65 percent. Investor sentiment weakened after reports that Meta Platforms was considering selling access to its AI computing infrastructure, fueling concerns the company may have built more capacity than needed. Samsung and SK Hynix also faced pressure after reports that Apple is in talks to source chips from two Chinese semiconductor companies, raising competition concerns. The Philadelphia Semiconductor Index tumbled 6.3 percent overnight. "Semiconductor stocks came under pressure after reports that Meta could enter the cloud infrastructure business," said Lee Kyoung-min, an analyst at Daishin Securities. "Reports that Apple is exploring chip sourcing from Chinese semiconductor companies also raised concerns that increased supply could ease supply bottlenecks and weaken chip pricing."Foreigners and institutions sold a net 4.37 trillion won and 2.07 trillion won respectively, while individuals bought a net 6.26 trillion won. Trade volume was 499.85 million shares worth 48.86 trillion won ($31.44 billion). Federal Reserve Chair Kevin Warsh said inflation expectations and inflation risks have eased in recent weeks, bolstering hopes for a delay in an interest rate hike.