The South Korean stock market suffered a sharp decline as investor sentiment towards the artificial intelligence boom continued to sour, dragged down by a massive sell-off in the country's leading chipmakers.

The benchmark Kospi index tumbled as much as 7.6%, reaching its lowest point since April 20. Shares of SK Hynix plummeted 11%, while Samsung Electronics dropped by more than 9%.

These steep declines signal growing concerns that as the AI buildout progresses, market positioning has become overly concentrated and corporate debt levels are rising. Jung In Yun, CEO of Fibonacci Asset Management Global, noted that the recent wave of selling in semiconductor stocks appears to be driven more by a sharp deterioration in market sentiment than by any direct changes in fundamentals.

Investors are increasingly questioning whether the pace of spending on AI infrastructure is sustainable over the long term.