South Korea's KOSPI Plunges Over 5% on Tech Rout, Triggering Trading Halt

South Korea's benchmark KOSPI index plunged more than 5% on Monday, triggering a temporary trading halt as a deep selloff in heavyweight technology stocks rippled across Asian markets. The rout was fueled by mounting investor concerns over artificial intelligence valuations and the profitability of semiconductor companies, according to a report from Investing.com.

Heavyweight Tech Stocks Lead Decline

The KOSPI index slumped by as much as 5.2%, prompting a market-wide trading curb to be activated. The sharp losses were concentrated in the country's largest technology and electronics firms, which carry significant weight in the index.

The selloff was led by major semiconductor and component manufacturers:

• SK Hynix Inc. (KS:000660) tumbled nearly 10%.
• Samsung Electronics Co Ltd (KS:005930) dropped more than 6%.
• LG Innotek Co Ltd (KS:011070) slid over 8%.

Selloff Hits Regional Supply Chain

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The downturn extended beyond South Korea, impacting other major players in Asia's semiconductor supply chain. In Japan, Kioxia Holdings Corp. (TYO:285A) fell nearly 9%, Murata Manufacturing Co. (TYO:6981) lost almost 6%, and TDK Corp. (TYO:6762) dropped approximately 5%.

In contrast, Taiwanese giants such as Taiwan Semiconductor Manufacturing Co. (TW:2330) and Foxconn Technology Co Ltd (TW:2354) showed more resilience, trading with little change, Investing.com reported.

Investor Concerns Mount Over AI Returns

The market action follows a period of heightened volatility for Asian tech stocks, exacerbated by Samsung Electronics' recent preliminary earnings report. The results failed to reassure investors that memory-chip profitability can keep pace with the massive capital spending required for AI infrastructure.

After several months of strong gains in the sector, investors are becoming more cautious. The selloff reflects growing questions as to whether the billions of dollars being committed by major tech companies to AI can generate sufficient returns on investment.