Asian Stocks Plunge! South Korea's Kospi Drops 8%, Triggers Circuit Breaker for Second Consecutive Day, SK Hynix Falls 13%, Nikkei Tumbles 1,600 Points

Asian technology stocks declined again during trading on Wednesday (29th), driven by renewed weakness in U.S. semiconductor stocks from the previous day, with chipmakers leading the sell-off.

South Korea's Kospi index opened higher but quickly turned lower, plunging 8% and triggering a market-wide circuit breaker for the second consecutive day, bringing its two-day cumulative loss to over 18%. Despite reporting record-breaking quarterly revenue and profit, South Korea's memory giant SK Hynix failed to meet analyst expectations. Its subsequent earnings call provided little detail on long-term contracts or shareholder returns, sending its stock down as much as 13%, with a two-day cumulative drop nearing 25%.

Among other individual stocks, Samsung Electronics fell over 4%, LG Innotek dropped 9%, and Seoul Semiconductor declined over 6%.

Japanese chip stocks also declined, with memory manufacturer Kioxia down 10%, Tokyo Electron falling 8.5%, and SoftBank Group—viewed as an AI play due to its stake in ARM—dropping over 7%. The Nikkei 225 index plunged 1,600 points, or 2.6%, briefly trading at 60,750.10.

TSMC (2330-US) fell 3.7%, and Taiwan's weighted index broke below the 40,000-point mark. Hong Kong's Hang Seng China Semiconductor Index dropped over 5%.

The Wednesday selloff in Asian chip stocks extended the previous day's weakness in U.S. semiconductor shares, where Intel (INTC-US) fell nearly 6%, AMD (AMD-US) dropped 8%, and memory and storage stocks were broadly weak. Micron (MU-US) and Seagate Technology (STX-US) fell over 8%, Western Digital (WDC-US) declined nearly 7%, and SanDisk (SNDK-US) plunged 14%. SK Hynix's ADR (SKHY-US) also fell 9%.

Kieron Poon, Director of Asian Equities at Aberdeen Investments, said the ongoing decline in Asian chip stocks reflects "continued deleveraging in the South Korean market and weakening global tech investment sentiment." However, he emphasized that the recent volatility "does not change our positive long-term outlook for the industry."

Despite the sharp recent pullback, Poon believes this correction provides a strategic entry opportunity, as lower valuations have made quality stocks more attractive, allowing investors to build positions in strong companies at more reasonable prices.

David Riedel, Founder and President of Riedel Research Group, said the recent pullback in AI-themed chip stocks is mainly due to the market "giving back some of the overheated gains from earlier." While concerns over AI funding and intensifying Chinese competition are weighing on sentiment, he noted that "the market remains healthy," and memory chipmakers "will ultimately perform well, but need to give back some of the rapid gains accumulated in the past."