Shares of major semiconductor companies have fallen sharply across the US and Asia as a growing sell-off in artificial intelligence (AI)-related stocks continues to unsettle investors.

South Korea’s benchmark Kospi index experienced a major decline on Tuesday, falling 8% in early trading. Trading was temporarily paused through a market safety mechanism designed to slow panic selling, but the index continued to fall after trading resumed, eventually closing 10.8% lower.

The decline was led by major technology companies, with Samsung Electronics and SK Hynix both dropping more than 13%.

Nvidia Losses Trigger Wider Market Concerns

The downturn followed a sharp decline in Nvidia, one of the world’s leading AI chip companies. Nvidia shares dropped around 5% in New York on Monday, causing the company to lose its position as the world’s most valuable publicly listed company to Apple.

Investors have become increasingly cautious about the enormous amounts of money being invested into AI infrastructure and whether current valuations can be justified by future returns.

South Korea’s Market Faces Heavy Volatility

The technology-focused Kospi index had more than doubled from the beginning of the year until mid-June, but it has since lost around a third of its value.

South Korea’s stock market has been particularly volatile as large numbers of retail investors have entered the market, increasing the impact of rapid buying and selling.

The Kospi has been halted several times this year through a circuit breaker system, which is designed to prevent extreme market panic.

SK Hynix Shares Under Pressure

US-listed shares of SK Hynix also declined sharply, falling 7.5% on Monday to below the company’s Nasdaq debut price of $149 per share on 9 July.

The latest decline highlights growing uncertainty around AI investments, with investors closely watching whether the technology boom can continue supporting high valuations for semiconductor companies.