South Korea’s semiconductor stocks faced another major downturn as doubts about AI spending and intensifying competition from China weighed on investor sentiment, while Bitcoin continued trading well above its summer lows.
The KOSPI dropped 5.5% during Tuesday’s Asian session, leaving the benchmark approximately 38% below its June record high. The decline highlights a sharp shift in South Korean equities, contrasting with Bitcoin’s recovery of around 40%.
Bitcoin fell to roughly $58,000 shortly after the KOSPI reached its peak before rebounding to as high as $87,000. Data on the weekly chart shows a 20-day rolling correlation of -0.41 between Bitcoin and the Korean index, reflecting a moderately inverse relationship.
The contrasting performance suggests Bitcoin may gain relative appeal as investors pull back from AI-related investments. However, the negative correlation does not necessarily mean that money leaving chip stocks is flowing into Bitcoin.
The latest losses came after Broadcom (AVGO) CEO Hock Tan compared speculative AI investments to casino gambling, according to the Financial Times. His comments fueled concerns over whether the returns from AI will be sufficient to support the industry’s enormous infrastructure costs. At the same time, advances by Chinese memory-chip producer CXMT have raised concerns about stronger competition and the possibility of shrinking profit margins for established chipmakers, Bloomberg reported.
SK Hynix shares plunged about 10%, while Samsung Electronics declined roughly 7%. Selling pressure also reached U.S. premarket markets, where Micron Technology (MU) and SanDisk (SNDK), both active in the memory and storage chip sector, fell around 3% each.
