Samsung Electronics, SK hynix tumble 4-6% as AI slowdown fears rattle Kospi

The Kospi tumbled more than 3 percent on Monday, sliding to the 6,680 range, as spreading calls for a slowdown in AI development dragged Samsung Electronics and SK hynix down more than 4 percent and 6 percent, respectively. Concerns over a US interest rate hike and rising oil prices added to the pressure, with foreign investors offloading more than 3 trillion won ($2.23 billion) in the main market.

According to Korea Exchange, the Kospi closed down 225.54 points, or 3.26 percent, at 6,684.37. The index opened 217.30 points, or 3.14 percent, lower at 6,692.61, briefly pared its losses to as high as 6,773.97 during trading, then retreated again.

Foreign investors and institutions posted net selling of 3.29 trillion won and 1.17 trillion won, respectively, on the main market. Individual investors were net buyers of 2.97 trillion won.

The main drag on the market was the growing debate over slowing the pace of AI development. Dario Amodei, CEO of Anthropic, said Saturday (local time) that the company would reduce the speed of AI model improvements and introduce additional safeguards, including third-party evaluations. Tesla CEO Elon Musk and OpenAI CEO Sam Altman subsequently signaled agreement that the pace of AI development needs to be moderated.

Fears of a US interest rate hike and rising oil prices also weighed on the market. The US core consumer price index for August, released over the weekend, rose 0.3 percent from the previous month, exceeding the market consensus of 0.2 percent. In response, the probability of a September rate hike as reflected by the CME FedWatch tool climbed to around 86 percent, and the yield on the 10-year US government bond touched 5 percent during trading.

Oil price pressures from the Middle East persisted as well. With talks on transit through the Strait of Hormuz postponed and Saudi Arabia's east-west oil pipeline facing a shutdown, Brent crude surpassed $108 per barrel again.

Semiconductor stocks bore the brunt of the selloff. Samsung Electronics closed down 10,500 won, or 4.05 percent, at 249,000 won, while SK hynix fell 115,000 won, or 6.35 percent, to close at 1.697 million won.

Most large-cap stocks also declined. Samsung Electronics preferred shares fell 5.12 percent, SK Square dropped 8.17 percent, Samsung Electro-Mechanics lost 4.50 percent, LG Energy Solution slid 2.36 percent, Hyundai Motor fell 2.88 percent, and Samsung Life Insurance declined 3.09 percent. Samsung Biologics and KB Financial Group bucked the trend, rising 0.35 percent and 2.08 percent, respectively.

The Kosdaq closed down 13.85 points, or 1.69 percent, at 806.79, after opening 14.37 points, or 1.75 percent, lower at 806.27. On the Kosdaq, foreign investors and institutions posted net selling of 93.1 billion won and 29.8 billion won, respectively, while individual investors were net buyers of 109.2 billion won.

Among top Kosdaq-listed stocks by market capitalization, Alteogen fell 2.99 percent, Ecopro dropped 3.44 percent, Ecopro BM lost 5.80 percent, Jusung Engineering declined 1.44 percent, Rainbow Robotics fell 3.56 percent, Wonik IPS slipped 0.18 percent, Leeno Industrial fell 1.96 percent, and Simtech lost 4.95 percent. Robotis rose 0.31 percent.

Lee Kyung-min, an analyst at Daishin Securities, said the discussion was "not about halting AI development, but about moderating the pace of development and verifying safety," cautioning against reading it as a sign of a broader slowdown in the investment cycle. He added that "HBM is sold out, and SK hynix and Samsung Electronics together hold 83 percent of the market — this decline was driven by sentiment, not fundamentals."