Korean Stocks Sink Nearly 4% as AI Fears Hit Chipmakers

SEOUL, South Korea — Worries over whether the huge sums poured into artificial intelligence will pay off hammered South Korean markets on Tuesday, dragging the main stock index down nearly 4% and sending a newly listed data center company sharply below its offering price.

The benchmark Kospi lost 215.27 points, or 3.73%, to finish at 5,552.74, and at one point dipped to 5,493.24. The slide erased a modest two-day rebound that followed a steep run of selling, in which the index shed about 21% over seven sessions between Oct. 6 and last Thursday. Tuesday’s close left the Kospi 39.1% under its record finish of 9,114.55 set on June 22.

Chipmakers led the decline. Samsung Electronics dropped 2.98% to 211,500 won, and SK hynix gave up 4.23% to 1.22 million won, on course for its weakest close since April. SK Square, the holding company over SK hynix, slid 5%. Escalating protests in France added to the risk-off mood. Foreign investors and institutions were net sellers, while individual investors bought.

The day’s other blow came on the Kosdaq market, where Elice made its first appearance. The company sells AI cloud computing along with AI education and business software and plans to put most of its roughly $150 million in IPO proceeds into portable modular data centers. Its shares, priced at 90,500 won, at the top of the marketed range, ended the session at 61,500 won, a 32% loss for buyers at the offer. They traded as low as 56,500 won.

The slump came even though institutional demand for the deal had been heavy, with orders worth more than 388 times the shares on offer. Elice has said January-through-June sales came to 34 billion won, three times the prior-year level, with an operating profit of 10 billion won.

Investors around the region have grown wary of data center listings this month. Australia’s Firmus and SB Energy, a SoftBank unit that had filed for a U.S. offering, have shelved IPO plans, and AirTrunk postponed a planned Singapore real estate trust listing. Elevated inflation keeping borrowing costs high has sharpened questions about when AI infrastructure spending will earn a return.

Filed under: Chapin SC Business News