FX.co ★ South Korean Shares Plunge on AI Concerns

The benchmark KOSPI tumbled more than 3% to around 5,595 on Tuesday, erasing the previous session’s gains as renewed selling in semiconductor shares underscored lingering doubts about the durability of AI-related investment. Samsung Electronics and SK hynix dropped over 3% and 6%, respectively, amid mounting concern that debt-financed AI infrastructure and high borrowing costs are weighing on the sector’s outlook. Other major decliners included SK Square (-7.1%), LG Energy Solution (-3.9%), Hyundai Motor (-4.8%), Hanwha Aerospace (-11.3%), Doosan Enerbility (-6.6%), HD Hyundai Heavy Industries (-7.4%), and Kia Corporation (-3.5%).

At the same time, South Korea’s planned 800 trillion won investment in four semiconductor fabrication plants, along with SK hynix’s 2 trillion won supplier financing program, is intended to bolster domestic chipmaking capacity and reinforce the semiconductor supply chain, even as infrastructure constraints and US trade-related challenges persist.