South Korean shares tumbled Tuesday, leading a selloff in chip stocks in Asia, with the benchmark Kospi heading toward its steepest daily decline in over four months.

The Korean market's plunge mirrored a broad selloff in U.S. technology and semiconductor stocks.

"The Nasdaq fell overnight, spooked again by concerns over excessive AI spending and possibly some anxiety ahead of the key central bank decisions this week," Maybank analysts said Tuesday.

Seoul-based Mirae Asset Securities analysts also said the Kospi's decline reflected market concerns over intensifying competition from China and a potential shift in the global memory chip supply chain.

The Kospi, heavily exposed to memory chip makers, fell as much as 11% to 6031.38 in early afternoon trading, putting it on track for its largest single-day drop since a 12% slide on March 4, according to FactSet.

The market operator triggered two trading halts on the Kospi to curb volatility and similar brief halts on the smaller, technology-heavy Kosdaq index.

The decline was driven by major memory-chip producers Samsung Electronics and SK Hynix, which together represent roughly half of the Kospi's total market capitalization.

Shares of index heavyweight Samsung Electronics slumped as much as 13%, on track for their sharpest daily fall since plunging 14% on Oct. 24 in 2008, according to FactSet data.

SK Hynix shares dropped as much as 14%, heading for their biggest one-day drop since July 2, after their American depositary receipts fell below their initial offering price overnight in New York.

Mirae Asset said in a report Tuesday that market sentiment was weighed down by reports that China had localized the production of lithography equipment. It also noted that Chinese memory-chip maker CXMT has become the most valuable company listed in mainland China.

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

(END) Dow Jones Newswires

July 28, 2026 01:01 ET (05:01 GMT)

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