South Korea's Kospi plunges 10.5% on AI chip stock selloff

Chinese chipmaker CXMT surges 466% in Shanghai IPO debut

HONG KONG — South Korea’s Kospi index fell more than 10% on Tuesday, triggering a temporary halt in trading, as heavy selling of chipmaking stocks deepened concerns about the sustainability of the artificial intelligence rally.

The Kospi was down 10.5% at 6,051.19 by midday, its lowest level since April, according to the Associated Press. Shares in Samsung Electronics tumbled 12%, while shares in SK Hynix fell 12.7%.

Analysts attributed the selling to expectations that competition from Chinese AI startups and chipmakers might undermine gains for global companies whose shares have risen sharply during the AI rally, according to the AP.

The debut of Chinese chipmaker CXMT on Monday amplified those concerns. CXMT surged 466% in its first day of trading on Shanghai’s tech-oriented STAR exchange, raising at least $8.6 billion in its initial public offering.

Oil prices also fell more than 1% on Tuesday, while U.S. futures were little changed, according to the AP.