AI Stock Rout Hits Asia as Japan, South Korea Markets Plunge

Asian stock markets plunged on Friday as a sharp sell-off in US technology shares spread across the region, triggering a temporary trading halt in South Korea and heavy losses in Japan and Taiwan.

South Korea's benchmark KOSPI index fell as much as 8.6% in early trading, dropping below the 5,000-point level for the first time in nine months.

The Korea Exchange activated a circuit breaker at 9:03 a.m. local time, suspending stock and derivatives trading for 20 minutes.

Japan's Nikkei 225 dropped more than 6%, while Taiwan's benchmark stock index declined over 8% as semiconductor and artificial intelligence-related companies came under intense selling pressure.

South Korean chipmakers were among the hardest hit, with Samsung Electronics falling around 10% and SK Hynix losing nearly 13% in early trading.

In Japan, semiconductor companies also recorded steep losses, including Kioxia and Tokyo Electron.

The regional downturn followed a major sell-off on Wall Street, where the Nasdaq Composite plunged 5.5% and the S&P 500 dropped 4.4% on Thursday.

Approximately $3 trillion in market value was erased from S&P 500 companies during the US session, according to Reuters.

Investors have grown increasingly concerned about the sustainability of massive investments in artificial intelligence infrastructure, including data centres and advanced semiconductor production.

The US midterm election results have added uncertainty, with market participants weighing the possibility of tighter regulation affecting AI development and data centre construction.

The sell-off highlights the exposure of Asian technology manufacturers to changes in US investment expectations, particularly as South Korea, Taiwan and Japan play central roles in global semiconductor supply chains.