AI Profitability Fears Trigger Sharp Asian Sell-Off, Korean Chipmakers Lead Decline
Asian equities declined on Tuesday as investors questioned the financial sustainability of artificial intelligence infrastructure spending. South Korea’s KOSPI index fell 3.7%, with memory chip giant SK Hynix dropping 3.5% toward its lowest close since April. Samsung Electronics lost 1.8%, while Japan’s Nikkei 225 slipped 1.2%. This regional weakness occurred despite a rebound in U.S. chip stocks overnight, where the Philadelphia Semiconductor Index rose 1.6% to end an eight-day losing streak. The market turmoil precedes a critical week of corporate earnings, including reports from Netflix, Meta Platforms, and Tesla, which will test investor confidence in AI capital expenditure plans.