South Korea’s Kospi index took a steep dive, closing down 10.8% at 6,023.66, marking its lowest point since April. The sell-off was sharp enough to trigger several temporary trading halts during the session, highlighting the market’s intense volatility.

Samsung Electronics shares plunged 13.4%, while SK Hynix slid 14.7%, a steep fall especially notable since SK Hynix recently debuted on Wall Street pricing its IPO at $149, but saw its US-traded shares slipping below that to $143 even before this drop. The catalyst behind the market turmoil was a report revealing that China has started mass-producing homegrown deep ultraviolet (DUV) chipmaking equipment. This technology is central to printing circuit patterns on silicon wafers and has long been a gap between Chinese manufacturers and global leaders.

Adding fuel to the fire, Chinese memory chipmaker CXMT made a spectacular Shanghai debut on Monday, surging 466% during its IPO, which raised over $8.6 billion. However, its shares retreated 4% the following day, signaling mixed investor sentiment. Analysts from Morningstar labeled the sell-off an exaggerated knee-jerk reaction, emphasizing that dominant chipmakers like Samsung and SK Hynix are unlikely to lose their technological edge quickly despite China’s progress.

The ripple effect spread beyond South Korea. Tokyo’s Nikkei dropped 4%, Taiwan’s Taiex lost 4.7%, dragging down TSMC shares by 3%. In contrast, Hong Kong’s Hang Seng index slightly rose by 0.3%, while Shanghai’s Composite dipped 1.2%. Meanwhile, US chip stocks had already been feeling pressure with Nvidia down 5%, AMD 5.2%, and Micron Technology 2.3% on Monday.

Markets are also reacting to a broader tech recalibration, with AI-related stocks seeing profit-taking after months of rallies, raising questions about valuation sustainability. Meanwhile, oil prices softened as US-Iran tensions cooled, Brent crude falling to about $84 per barrel.

The sharp plunge in the Kospi stands out as one of the largest daily percentage drops in recent years, reflecting heightened investor nerves over the accelerating technology competition in semiconductors a sector critical to global supply chains and innovation.

This article provides information only and does not constitute financial advice.