Markets · · 2 min read
Editor: Bohdan S.
Kospi sinks 7.5% as AI chip rout wipes $1 trillion from tech giants
SK Hynix and Samsung led a global slide in AI and chip stocks on worries that higher interest rates will make the AI build-out harder to fund, while Treasuries drew safe-haven buying.
The short answer
South Korea's Kospi closed 7.5% lower on Thursday at its weakest level since April, as SK Hynix and Samsung Electronics fell sharply in a global sell-off of AI and chip stocks. CNBC said 20 leading AI names lost over $1 trillion this week. The Financial Times (FT) reported investors bought Treasuries for shelter.
What happened
Chip stocks fell across Asia, Europe and the US on Thursday. In Seoul, the Kospi ended 7.5% down at 5,554 points, its lowest close since April 8, Cointelegraph reported, after an intraday drop of about 8% set off circuit breakers. SK Hynix lost about 11% and Samsung Electronics around 9.5%. In Japan, Advantest slid almost 14% and SoftBank Group 7.9%. Dell fell 9% in New York, while Nvidia and AMD each lost about 2%. CNBC tallied more than $1 trillion of lost value this week across 20 large AI and chip firms. The Financial Times (FT) reported that Treasuries rallied as investors sought shelter from the turmoil.
What it means
The trigger is the cost of money. A hotter-than-expected US inflation report on Wednesday revived bets that the Federal Reserve will raise rates again, and the US 10-year Treasury yield has been above 5%. The AI boom depends on enormous spending on chips and data centers, much of it financed with debt. When borrowing gets more expensive, investors start asking whether those projects will still pay off. Earlier this week the bosses of Broadcom and Intel both flagged financing as a growing obstacle for AI.
Competition is a second worry, especially for memory makers. China's ChangXin Memory Technologies said it had made a breakthrough in packing more data into its chips, and some analysts fear a glut of memory chips later in the decade as producers expand. That helps explain why South Korea, whose market leans heavily on SK Hynix and Samsung, was hit hardest. The Kospi has now lost 15.5% so far this week.
Not everyone sees a turning point. Dan Ives of Yorkville Ives argued that rates are a financing problem rather than a sign that demand for AI computing is fading, and said cuts to big tech spending plans or falling chip rental prices would be the real warning signs. Nvidia boss Jensen Huang also told Bloomberg he saw no need for Nvidia to support CoreWeave, which helped some cloud computing stocks pare their losses.
The sell-off reached beyond stocks. The FT pointed to buying of US government bonds as investors looked for safety. Bitcoin dipped to around $80,000, its lowest in more than three weeks, showing that crypto is trading in step with tech risk appetite. Samsung and SK Hynix report quarterly results at the end of October, which could be the next test for the sector.
The bull case
Orders for AI chips have not been canceled, and memory makers are still reporting huge profits. Samsung is expected to post an operating profit of around 107 trillion won for the third quarter. If demand holds, this could prove to be a valuation reset driven by rates rather than a collapse in the business, and falling yields could revive appetite for growth stocks.
The bear case
Chip stocks had run up sharply, Samsung had more than doubled this year, so there is room for further falls if funding gets tighter. Higher rates could force some data center builders to slow spending, and new Chinese memory capacity could pressure prices later. Markets heavily weighted to chips, such as South Korea and Taiwan, are especially exposed to that risk.
Why it matters
For investors
Chipmakers, chip equipment suppliers and debt-funded cloud computing firms are most exposed, along with tech-heavy indexes in Korea, Japan, Taiwan and the US. Government bonds and gold may benefit if investors keep seeking safety.
The wider context
Many index funds and pensions now hold a large share of AI and chip stocks, so swings in this one theme can move a whole portfolio. The episode is a reminder of how concentrated popular indexes have become.
Market impact
| Asset (ticker) | Possible move | Timeframe | Why |
|---|---|---|---|
| iShares MSCI South Korea ETF (EWY) | ↓ Down | Short term | The Kospi fell 7.5% as its two biggest chip stocks slumped. |
| VanEck Semiconductor ETF (SMH) | ↓ Down | Short term | Rate fears and funding worries are weighing on chip stocks worldwide. |
| US 10-year Treasury yield | ↓ Down | Short term | Safe-haven buying of Treasuries pushes their yields lower, the FT reported. |
| Bitcoin (BTC/USD) | ↓ Down | Short term | Bitcoin slid toward $80,000 alongside the tech sell-off. |
The FinPrism newsroom's view of how these figures could move, as of . It is general news commentary, not a recommendation to buy, sell or hold anything.
Frequently asked questions
Why did the Kospi fall so much on October 15, 2026?
The Kospi dropped 7.5% because its largest stocks, SK Hynix and Samsung Electronics, fell sharply in a global sell-off of AI and chip shares. Investors fear higher US interest rates will make AI projects harder to fund, and Chinese memory chip competition added to the worries.
Why are AI stocks falling?
Hotter US inflation data raised the odds of another Federal Reserve rate hike, lifting borrowing costs. Building AI infrastructure needs huge sums, often borrowed, so investors are questioning whether the spending will pay off. Some analysts say demand for AI computing remains strong and that the issue is financing.
How much value have AI stocks lost this week?
According to CNBC, 20 of the world's most valuable AI and semiconductor companies lost more than $1 trillion in combined market value in the week through Thursday, October 15. The losses spread from South Korea and Japan to Europe and Wall Street.
Sources: CNBC, Financial Times, Cointelegraph, CoinDesk
How this was made: written with AI assistance from the sources listed above, following our editorial standards.
