South Korea temporarily paused trading on Tuesday as its benchmark stock index led losses across the region, closing more than 10 percent lower. The sharp decline reflects growing investor anxiety over AI spending sustainability and intensifying China semiconductor competition. Market participants are reassessing valuations of technology companies amid concerns that massive artificial intelligence investments may not yield near-term returns.

Simultaneously, China's advancing chip capabilities threaten to erode the competitive moat of established semiconductor leaders. The Korean market's circuit breaker activation underscores the severity of the selloff, with major tech-heavy indices across Asia following suit. Analysts suggest the correction may continue as earnings season approaches and companies provide guidance on capital expenditure plans.