South Korean chip stocks slide as AI profits disappoint

South Korean stock markets are experiencing significant panic selling, driven by investor concerns over the AI-driven chip sector's profitability and a potential market crash. The market's heavy reliance on Samsung and SK Hynix has backfired as AI revenue fails to meet expectations, leading to weakened chip orders and profit-taking. Additionally, rising Chinese competition from manufacturers like CXMT and persistent high interest rates are further pressuring South Korean tech stocks. Despite the downturn, analysts view this as a sharp correction rather than a crash, noting that South Korean chips remain essential globally. The selloff reflects a broader market recalibration as investors accept that AI profitability will take longer than initially anticipated.