South Korea led a selloff in Asian chip stocks, as rising bond yields exacerbated worry over the large sums of cash being shelled out by Big Tech. The KOSPI index fell sharply, with heavyweights Samsung Electronics and SK Hynix dropping more than 3% each. Investors are reassessing valuations across the semiconductor sector as higher borrowing costs pressure the present value of future cash flows.

The decline reflects broader anxiety about capital expenditure plans at major U.S. technology firms. While companies like Microsoft and Meta have signaled continued heavy investment in AI infrastructure, the pace of spending has raised concerns about near-term returns. Memory chip makers are particularly vulnerable because their revenue depends heavily on data-center demand cycles.

Analysts note that Korean chipmakers have outsized exposure to the memory market, which is more cyclical than logic chips. Any slowdown in server procurement could hit earnings disproportionately. The selloff also comes as global bond yields climb, making high-growth tech stocks less attractive relative to fixed income.

Market participants are watching upcoming earnings reports and guidance from both U.S. hyperscalers and Korean foundries for clues on demand trajectory. A sustained rise in yields could keep pressure on the sector through the quarter.