▲ Financial data is displayed on a screen at Hana Bank's dealing room in Seoul on July 1, 2026. (Yonhap)

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Seoul shares plunge nearly 8 pct on tech sell-off amid renewed AI concerns

SEOUL, July 2 (Yonhap) -- South Korean stocks dipped nearly 8 percent Thursday, dragged down by a sharp sell-off in semiconductor shares as investor sentiment soured amid renewed concerns over excess capacity. The Korean won weakened against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) plunged 655.32 points, or 7.89 percent, to close at 7,648.09. after falling as low as 7,616.33.

Due to the sharp drop, the bourse operator Korea Exchange (KRX) activated a sell-side sidecar for the KOSPI around 9:07 a.m., halting program trading for five minutes.

A sell-side sidecar is triggered when the KOSPI 200 Futures index decreases 5 percent or more for at least one minute.

Investor sentiment toward semiconductor stocks weakened after media reports said U.S. tech giant Meta Platforms was considering selling access to its artificial intelligence (AI) computing infrastructure, fueling concerns that the company may have built more AI computing capacity than it currently needs.

Samsung Electronics and SK hynix -- the top two chipmakers -- also came under selling pressure after reports that Apple Inc. is in talks to source chips from two Chinese semiconductor companies, raising concerns about intensifying competition for Korean chipmakers.

U.S. stocks retreated overnight. The S&P 500 slipped 0.2 percent, while the tech-heavy Nasdaq 100 fell 1.5 percent. The Philadelphia Semiconductor Index, a key gauge of chip stocks, tumbled 6.3 percent.

Federal Reserve Chair Kevin Warsh said inflation expectations and inflation risks have eased in recent weeks, bolstering hopes for a delay in an interest rate hike.

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