Full Breakdown
AI-Driven Chip Stocks Plunge, Triggering South Korean Market Halt
7/29/2026, 4:01:51 AM
Core Event: Circuit-Breaker Halt on the Kospi Amid AI Stock Sell-off
On a Tuesday morning, South Korea’s benchmark Kospi index was temporarily halted after sliding 8%, then resumed trading to close 10.8% lower. The sharp decline was led by major chipmakers Samsung Electronics and SK Hynix, each shedding more than 13% of their market value. The halt invoked the exchange’s circuit-breaker mechanism, which has been used multiple times this year to curb panic selling.
Background & Context: AI Hype Fuels Volatility
The sell-off follows a broader downturn in artificial-intelligence-related equities. In New York, Nvidia’s shares dropped 5% after a Wall Street Journal report that the company was negotiating a roughly $250 billion financing package for OpenAI’s data-centre expansion. The dip allowed Apple to overtake Nvidia as the world’s most valuable listed company, buoyed by a 25% rise in its stock this year. South Korean markets have seen heightened activity from retail investors, contributing to the recent volatility.
Data & Statistics
- Kospi fell 10.8% on the day of the halt.
- Samsung Electronics and SK Hynix each declined by more than 13%.
- On July 9, SK Hynix’s U.S.–listed shares dropped 7.5%, trading well below the $149 offer price set for its record-breaking Nasdaq debut.
- Japan’s Nikkei 225 closed nearly 4% lower.
- China’s ChangXin Memory Technologies (CXMT) surged about 470% after its Shanghai IPO debut.
Official Statements & Responses
Jun Bei Liu, founder of investment firm Ten Cap, expressed concern that the rapid influx of capital into AI development, combined with intensifying competition from China, is prompting investors to take profits. She suggested that, despite the current pull-back, many may redeploy capital into AI stocks after the U.S. holiday season.
Why It Matters: Investor Sentiment and AI Funding Outlook
The episode underscores the sensitivity of chip-heavy markets to AI-related news and highlights the role of circuit-breaker safeguards in tempering extreme moves. Analysts note that the episode may temper short-term enthusiasm for AI equities, even as long-term funding for AI projects—exemplified by Nvidia’s potential $250 billion OpenAI partnership—remains robust.
