South Korea’s benchmark Kospi index plummeted as much as 8% on Thursday, marking the sharpest single-day decline in the region’s AI-driven rally to date.
The sell-off was driven by intensifying concerns over potential overcapacity in the global semiconductor sector, prompting investors to rapidly unwind positions in chipmakers and related technology names.
Taiwan’s markets also retreated sharply, with TSMC and other semiconductor giants facing heavy selling pressure as traders reassess the sustainability of artificial intelligence growth bets.
The volatility extends a broader correction that began earlier in the week.
Asian equity markets had already retreated on Wednesday, weighed down by growing caution over stretched valuations in the technology sector.
The sell-off was most pronounced among semiconductor and AI-related names, as traders adopted a more defensive posture.