South Korean and Japanese stocks plunged on Thursday as investors widened their scrutiny of the AI boom from chip demand to the companies financing the infrastructure behind it.
The KOSPI sank as much as 8%, triggering a level-one circuit breaker that halted trading for 20 minutes from 12:38 pm in Seoul.
The index was down 7.7% at 5,548.78 later in the session, with Samsung Electronics losing 9.5% and SK Hynix 11.4%.
The Korea Exchange activates the first-stage halt when the benchmark remains at least 8% below its previous close for one minute.
Japan’s Nikkei 225 fell 4.8% to 64,489.06 as SoftBank, Kioxia and Tokyo Electron sank.
Hotter US inflation supplied the immediate catalyst, but the deeper concern is increasingly about AI economics and whether the companies funding the infrastructure boom can sustain spending at current levels.
Korea becomes the pressure valve for AI financing fears
The KOSPI is taking the bigger hit because Samsung and SK Hynix ultimately depend on continued spending by data-centre operators and hyperscalers.
Those customers came under pressure on Wall Street. CoreWeave fell nearly 16% on Wednesday as yields on one of its bonds approached 15%, while Oracle dropped about 9%.
The Philadelphia Semiconductor Index slid 4.3%, taking its decline to almost 12% in nine sessions.
Kiwoom Securities analyst Han Ji-young told Asia Business Daily that the market’s yardstick for the AI cycle is shifting away from the sheer size of capital expenditure towards profitability, cash generation and the stability of financing.
SoftBank makes the Nikkei a two-sided AI trade
Japan is being hit at both ends of the AI capital chain.
Kioxia and Tokyo Electron represent memory and semiconductor equipment, while SoftBank, down about 9.4% is increasingly treated as a listed proxy for the financing and valuation of OpenAI and the wider AI infrastructure boom. Kioxia fell 11.2% and Tokyo Electron lost 7.3%.
The Nikkei’s construction amplifies that pressure. Technology accounted for 43.75% of the index before Thursday’s session, with Advantest, Tokyo Electron and SoftBank among its largest individual weights.
XS.com analyst Antonio Di Giacomo told The Wall Street Journal that persistent inflation, costly borrowing and doubts around technology companies were combining to weaken risk appetite.
TSMC now has to prove physical AI demand remains intact
The sell-off spread across Asia. Taiwan’s Taiex dropped about 3%, Hong Kong’s Hang Seng lost 1%, the Shanghai Composite fell 1.4% and Australia’s ASX 200 edged 0.1% lower.
Yet there is still little evidence that physical AI demand has collapsed.
ASML said this week that equipment demand is likely to exceed supply through 2028, with customers already discussing capacity for 2029 and 2030.
TSMC provides the next test. Third-quarter revenue already reached a record NT$1.49 trillion, while analysts expect net profit to rise about 65% to NT$746.3 billion, which would mark a sixth consecutive record quarter.
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