Chipmakers fall 8% as AI jitters rattle investors

An 8% plunge in South Korea’s Kospi index triggered an automatic trading halt on the morning of 28 July 2026. Chipmaker stocks drove the slide, as deepening anxiety over artificial intelligence demand rattled investors from the US to Asia.

Major South Korean semiconductor companies saw the steepest drops, and chip-related shares across Asia slumped, signalling a swift reassessment of the AI sector’s near-term prospects.

The swift rout reveals deepening doubts about the sustainability of an AI rally that had inflated chipmaker valuations. Investors now worry that the massive build-out of AI infrastructure will not deliver hoped-for profits, sparking a flight from risk.

That reversal comes after a long stretch of AI enthusiasm that had lifted semiconductor stocks globally. Now, with valuations under pressure, market sentiment is souring.

Looking ahead, the trading halt and sell-off could draw regulatory scrutiny and prompt companies to recalibrate their AI investment strategies. Market participants will monitor upcoming earnings reports and economic data for further signs of the sector’s health.