South Korean shares suffered one of their biggest falls in years on Wednesday, as a sell-off in technology companies, particularly chipmakers, worsened as investors worried about the sustainability of a big investment in artificial intelligence.
The technology sector has come under intense pressure as traders increasingly question the huge sums of money being invested in the development of artificial intelligence and question whether companies will be able to live up to high expectations.
After two years of growth that drove many markets and companies to record highs, optimism around the technology sector began to wane, with chip makers taking the biggest hit.
South Korea’s Kospi stock index fell more than 12 percent at one point, deepening Tuesday’s nearly 11 percent decline. SK hynix and Samsung are the most affected companies.
SK hynix shares fell almost 20 percent, after losing more than 14 percent of their value the day before. The company has now lost more than 50 percent of its market value from its record high a month ago.
At the same time, Samsung recorded a drop of more than 12 percent.
By the end of the trading day, losses had eased: Kospi ended six percent lower, while SK hynix and Samsung halved earlier losses.
