South Korean Shares Plunge on AI Concerns

The benchmark KOSPI plunged more than 3% to around 5,595 on Tuesday, reversing gains from the previous session, as renewed selling in semiconductor stocks reflected persistent concerns over the sustainability of AI investment. Samsung Electronics and SK hynix slid more than 3% and 6%, respectively, as worries over debt-funded AI infrastructure and elevated borrowing costs continued to cloud the sector's outlook. Other notable declines 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%). Meanwhile, South Korea's planned 800 trillion won investment in four semiconductor fabs and SK hynix's 2 trillion won supplier financing program aim to expand domestic chipmaking capacity and strengthen the semiconductor supply chain, although infrastructure and US trade-related hurdles remain.