South Korean stocks resumed their declines on Monday as DeepSeek's latest model sparked concerns over demand for memory chips, compounding market worries over AI financing. The benchmark Kospi dropped as much as 3.2%, with chipmakers Samsung Electronics Co. and SK Hynix Inc. each falling more than 4% before paring losses.
Japan's tech-heavy Nikkei 225 slid about 2%, with chip-equipment maker Advantest Corp. among the biggest decliners. US chipmakers extended their losses to an eighth-straight session on Friday, as investor nervousness grew over the soaring costs of the AI buildout.
Meanwhile, China's DeepSeek released an update to its AI model over the weekend that it says is faster and leaner, fueling worries that less memory will be required. Kang Dae Kwun, chief executive officer at Life Asset Management, said there are "too many uncertainties to call a bottom" for Korean stocks, citing uncertainty over funding for US companies' AI projects as the key source of market jitters. "Korean companies cannot make money unless the US firms continue to spend," he said.
The Kospi is coming off its worst weekly performance since October 2008. Even so, the Korean benchmark is still up more than 30% this year, after ravenous AI spending drove memory prices to record highs.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing