By Kwanwoo Jun

Technology stocks in South Korea, Japan and China declined, after U.S. artificial-intelligence chip maker Broadcom's guidance fell short of elevated investor expectations, raising concerns that the AI spending boom may come with growing margin pressure.

South Korean chip stocks fell sharply on Friday, tracking their U.S. peers' overnight retreat and prompting the stock market operator to briefly halt trading to reduce volatility.

Shares of SK Hynix, a leading high-bandwidth-memory supplier for Nvidia, fell as much as 9.6% as of early afternoon trade. Samsung Electronics, the world's top memory-chip maker, lost as much as 7.5%.

The tumble in the two companies, which together account for about half of the Kospi's total market capitalization, led to a five-minute halt on the benchmark Kospi's constituents. The trading curb, designed to limit excessive market moves, was triggered by the Kospi 200 Futures index's drop of more than 5%. The Kospi was down around 5% for most of the morning session.

Kiwoom Securities analyst Han Ji-young said Friday that South Korean chip stocks were taking a breather after steep run-ups in their prices, as Broadcom's results failed to live up to expectations among some investors and prompted traders to take profit after recent strong gains in U.S. tech stocks.

SK Hynix was on track to fall for a third consecutive session on Friday, while Samsung was set to log a second straight day of declines.

"The recent stock market correction is not driven by fundamental factors such as corporate earnings. Rather, it appears to be a pause following the market's rapid gains," Han said.

Weakness in the tech-heavy Nasdaq overnight, with Broadcom tumbling nearly 13%, spilled over into some other Asian markets, including Japan and China.

Semiconductor-related stocks led declines in Japan's Nikkei Stock Average on Friday. The benchmark index was down 1.6% in early afternoon trading. Chip maker Renesas Electronics was recently 6.3% lower, semiconductor-production-equipment maker Tokyo Electron was down 7.1% and chip-testing-equipment maker Advantest was 4.9% lower.

Chinese semiconductor stocks also fell after rallying earlier in the week. Shares of Semiconductor Manufacturing International, China's largest chip maker, shed 2.3% in Hong Kong. GigaDevice Semiconductor's shares lost 3.5% in Shanghai, while Foxconn Industrial Internet dropped 2.3%.

In South Korea, the weaker won also weighed on equities, with foreign investors remaining net sellers on Friday. The local currency fell to its weakest level against the U.S. dollar since 2009, as the greenback climbed to an intraday high of 1,549.25 won.

--Kosaku Narioka and Jiahui Huang contributed to this article.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

June 05, 2026 00:12 ET (04:12 GMT)

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