Asian stocks plunge as semiconductor selloff spreads

Asian stock markets fell sharply on Thursday, July 2, as a selloff in semiconductor shares continued, with South Korea's Kospi index sinking 2.7 percent and Japan's Nikkei dropping 1.1 percent. The declines extended losses from Wednesday and followed a brutal rout in U.S. chip stocks earlier in the week, reigniting concerns that the artificial intelligence-driven rally has outpaced fundamentals.

South Korea's market experienced particularly heavy losses, with semiconductor giants SK Hynix plunging 7.7 percent and Samsung Electronics tumbling 6.2 percent. The two companies account for more than half of the benchmark's market value, making the national index vulnerable when they stumble. The Kospi had surged an eye-watering 68 percent in the second quarter on soaring AI-related demand for memory chips before the recent correction.

The selloff originated in the United States, where a gauge of semiconductor stocks dropped 6.3 percent on Wednesday. Micron Technology, a maker of memory chips essential for AI workloads, fell sharply. The declines were attributed to profit-taking after a historic rally and questions about whether valuations had become overheated. The pressure spread to...