The KOSPI dropped sharply by 8.10% to 6,208.34 on Tuesday morning, intensifying a global selloff in semiconductor shares. SK Hynix tumbled 11.01%, while Samsung Electronics slid 9.45%, just a day before the memory chip giant is set to release its quarterly earnings report.
Tech Stocks Drag Asian Markets Down
The Korea Exchange activated a sell-side sidecar mechanism shortly after trading opened, marking the 22nd instance this year. The Kosdaq index also triggered the same safeguard, falling 6.6% as of press time. Japan's markets followed the downward trend with Kioxia plunging 16.5%, Tokyo Electron dropping more than 9%, and Advantest declining 8%. SoftBank Group, often viewed as an AI investment proxy through its stake in Arm, lost close to 5%. The Nikkei 225 and Topix indexes fell 3.90% and 2.49%, respectively.
This selloff extends Monday’s weakness in U.S. chip stocks, where the VanEck Semiconductor ETF dropped over 2%, led by AMD and Teradyne shares falling 5% and 4%. Investors remain cautious amid skepticism about the massive AI spending by tech giants, despite SK Hynix and Samsung recently announcing $950 billion in AI-related deals.
Tuesday’s turmoil comes as SK Hynix prepares to report earnings on July 29, marking its first results since a record Nasdaq debut. The same day will see earnings from Microsoft and Meta, alongside a Federal Reserve rate decision. Apple and Amazon will close the week’s earnings calendar. The market jitters have spilled into cryptocurrencies, with Bitcoin trading near $63,199, down 2.9% over 24 hours. Meanwhile, U.S futures for the S&P 500, Nasdaq 100, and Dow Jones point to mild declines.
The outcome of SK Hynix’s earnings could play a key role in setting the market tone for the remainder of the week.
