Seoul’s benchmark index fell 5.9% as Samsung Electronics and SK Hynix slipped 8.4% and 7.5%, respectively, pulling the market lower. The drop follows a steep rally in the AI‑driven chip sector, with the two companies still riding high on demand.

Samsung Electronics projected a 19‑fold jump in second‑quarter operating profit, underscoring its ongoing earnings streak. Even with the sharp decline, the company signals that AI‑linked revenue will sustain growth, keeping investors focused on the chip narrative.

South Korean stocks cooled after a roughly 100% surge in the KOSPI during the first half of the year, a rebound that πεs to be partial cash‑in. Meanwhile, Japan’s Nikkei slipped 1.3%, with Tokyo Electron falling 2.45% and Kioxia Holdings plunging 11%, reflecting a broader slowdown in AI‑benefited names.

The correction suggests that while the AI story remains intact, investors are testing whether the sector can deliver on lofty valuations during earnings season. Market participants will watch earnings releases for signs that chip demand continues to meet expectations, and how that translates into future profitability and share prices.