Asian stock markets plunged on Tuesday, led by steep losses in South Korea and Japan, as renewed concerns over AI chip competition, rising bond yields, and high energy prices triggered a broad technology sell-off across the region.
South Korea and Japan led a sharp regional tech rout on Tuesday as investors reevaluated the profit margins and capital returns underpinning the artificial intelligence boom (according to Yahoo Finance Singapore). Analysts pointed to a mixture of soaring energy costs, elevated bond yields, and intensifying competition in advanced chip manufacturing as the primary catalysts driving investors away from high-valuation growth assets and toward the safety of government debt (Investing.com reported).
Samsung And SK Hynix Lead Seoul Declines
Shares of SK Hynix plunged more than 10 percent, while rival Samsung Electronics shed 7.4 percent, both hitting their lowest levels since August. The steep pullbacks reflected growing anxiety over whether the extraordinary memory-chip upcycle driven by AI infrastructure demand can maintain its momentum through 2028 (TradingKey noted).
“China continues to narrow the competitive gap with US companies across AI models, humanoid robotics, memory and other parts of the technology supply chain. Its ability to develop increasingly competitive products at lower costs is challenging established assumptions around market share, pricing power and the durability of margins.”
Chris Weston, research strategist at Pepperstone Group, via Yahoo Finance Singapore
During the session, the KOSPI fell as much as 7.4% to 5,914.35, hitting its lowest mark since late July, while South Korea’s fear index, the VKOSPI, surged about 23% intraday to 51 points for its biggest single-day jump since March 4. Phillip Wool, chief market strategist at Rayliant Global Advisors, noted that CXMT has yet to demonstrate large-scale production of advanced memory like high-bandwidth memory (HBM), an area where Korean chipmakers continue to dominate (CNBC reported).
SoftBank and Kioxia Shares Tumble in Japanese Market
Japanese equities experienced sharp catch-up losses after markets closed on Monday for a public holiday (BigGo Finance reported). Technology-focused investment giant SoftBank Group sank 8.5 percent, while chipmaker Kioxia tumbled more than 12 percent (Yahoo Finance Singapore noted). In the Japanese market specifically, Kioxia closed down 13.28% at 15,180 yen, while SoftBank Group closed down 8.50% at 5,310 yen.
Additional pressure hit Japanese equipment suppliers and electronics manufacturers. Technology accounts for roughly 45 percent of the Nikkei index (Invezz explained).
US Treasury Yields Ease as Oil Prices Drive Inflation
The benchmark U.S. 10-year Treasury yield stood down 5 basis points at 5.193%, easing away from a 24-year high of 5.364% reached the previous week, while the U.S. dollar remained supported near an 18-month high. The U.S. 10-year Treasury yield hovered near 5.2 percent, while Brent crude oil traded above $105 a barrel, maintaining upward pressure on global inflation (Invezz noted).
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