Korea's Chip Giants Lose Half a Trillion Dollars as AI Stock Fever Breaks

South Korea's Kospi index shed as much as 12.6% on Wednesday, July 29, 2026, its second brutal session in a row after an 11% slide the day before. Together the two days wiped out more than 40% of the index's value from a peak reached only about a month earlier, dragging it to its lowest level since early-to-mid April.

The damage is concentrated in exactly the two stocks that had powered the rally in the first place. SK Hynix and Samsung Electronics, which combined account for more than half of the Kospi's total market capitalization, each fell over 10% on Tuesday, with Samsung down nearly 10% again on Wednesday.

SK Hynix's collapse looks especially jarring given the underlying numbers. The chipmaker posted record profits for the second quarter of 2026, yet investors had priced in even more. Shares dropped as much as 16% on the miss relative to sky-high expectations rather than any actual earnings decline.

The sell-off wasn't confined to Seoul. Japan's Nikkei fell 1.5%, Taiwan's TSMC dropped 3% on Wednesday, and a broad swath of US chip names, including Intel, AMD, Sandisk, Western Digital and Seagate, retreated on Wall Street.

Nvidia's Ohio Bet Rattles Credit Markets

The trigger traces back to a Wall Street Journal report that Nvidia was in talks to funnel $250 billion into a massive OpenAI data-center project in Ohio. Nvidia shares closed 5% lower on Monday, dropping below $200, while its five-year credit default swaps spiked, a signal that bond markets are pricing in fresh balance-sheet risk from the scale of AI infrastructure spending.

Adding to the unease was a fresh reminder that China isn't standing still on chip self-sufficiency. Shares of memory maker CXMT surged 466% on its Shanghai debut on Monday, and a report from the Information said China has begun mass-producing homegrown deep ultraviolet lithography tools, undercutting the assumption that export controls would keep Chinese chipmakers permanently behind.

Not every corner of tech suffered. Apple's stock briefly pushed above a $5 trillion valuation even as the broader sell-off unfolded, a reminder that capital is rotating rather than fleeing tech altogether. Meanwhile Brent crude jumped roughly 3.6% to $87.14 a barrel in early trading, tied to separate news of US military action, adding another layer of volatility to an already jittery session.

SK Hynix's record quarterly profit still triggered a 16% share-price drop, underscoring how stretched expectations for AI-linked chipmakers had become before the correction.

Sources differ slightly on the precise low point reached by the Kospi, with one report citing a level unseen "since early April" after the two-day rout and another citing "since mid-April" following Tuesday's session alone. Both accounts agree on the broader picture: a fast, steep unwind of gains built almost entirely on AI infrastructure optimism.