South Korea's Kospi index sinks more than 7% on semiconductor share sell-off over AI boom worries - Audacy

South Korea's Kospi index fell more than 7% as a sell-off in semiconductor shares rippled through the market, with concerns about the sustainability of the artificial intelligence boom cited as a key driver. The scale of the move underscores how concentrated the benchmark's fortunes have become around a handful of chipmakers, whose valuations have climbed sharply on expectations for AI-related demand.

For global investors, the episode is a reminder of how quickly sentiment can shift in markets priced for a prolonged technology upcycle. Semiconductor firms sit at the center of the AI supply chain, so any reassessment of that growth story tends to transmit directly into Korean equities — and, given the sector's weight, into broader Asian market sentiment as well.

What to watch from here is whether the decline proves a short-term repricing or the start of a more durable change in expectations. Signals worth monitoring include upcoming earnings and guidance from major chipmakers, commentary on AI capital spending, and whether foreign flows into Korean equities stabilize. For now, the drop highlights the tension between long-term AI optimism and nearer-term valuation risk.