Asian tech stocks drop, KOSPI leads decline

The tech-heavy KOSPI dropped 3.1%, while Nikkei 225 slid 1.1%

Asian technology stocks fell sharply on Monday, with KOSPI leading the decline, as investors pared exposure to AI-linked chipmakers amid rising bond yields and renewed concerns over the sustainability of the AI rally ahead of central bank meetings this week.

The tech-heavy KOSPI dropped 3.1%, while Nikkei 225 slid 1.1%.

Semiconductor stocks remained at the centre of the pullback, with investors growing more cautious toward the AI trade after a period of outsized gains.

Investors reassessed whether the AI spending boom can sustain lofty valuations and earnings expectations. The MSCI Asia Pacific index declined around 0.5%.

South Korea’s technology sector remains particularly sensitive to shifts in AI sentiment because memory-chip giants Samsung Electronics and SK Hynix are major suppliers of high-bandwidth memory used in AI processors.

Chip stocks led losses, with SK Hynix dropping 4.3% and Samsung Electronics down 2.5%, weighing on the KOSPI, which was down 3.1%. LG Innotek slid 3.1%, adding to pressure across technology hardware stocks.

Japanese chip-related shares also came under pressure, with the broader semiconductor complex weakening as investors rotated out of high-growth technology names amid rising borrowing costs and geopolitical uncertainty.

Japanese technology stocks were also lower, led by Kioxia, which plunged 7.1%, while Murata Manufacturing dropped 3.6% and TDK slid 0.1%. Sony bucked the trend, gaining 3.1%, limiting losses among some large-cap electronics names.

The technology selloff unfolded against a broader risk-off backdrop after oil prices surged above $100 per barrel following renewed attacks involving Saudi energy infrastructure and Gulf shipping, raising fears that inflation could remain higher and keep central banks on a tighter policy path.