South Korea’s Kospi led a sharp pullback in Asia equities on Tuesday, as worries over AI‑related spending weighed on chip and tech stocks. The region’s markets fell after the U.S. Philadelphia Semiconductor Index dropped 2.2% on Monday, extending a three‑day sell‑off that has erased more than 7% of the index’s value. A report that a Chinese state‑backed firm is mass‑producing deep‑ultraviolet lithography equipment added to fears of new competition for foreign suppliers, according to Commerzbank Research. The Kospi sank for the largest single‑day decline since a 12% plunge on March 4, with the benchmark down 10.3% from its recent highs. Heavyweights SK Hynix slid 13% and Samsung Electronics fell 12%. In response, the Korea Exchange briefly suspended trading twice on both the Kospi and the tech‑heavy Kosdaq. Matt Simpson, senior market analyst at Stone X, noted the index’s “most bearish opening gap in four months” and warned that the 10% drop studied a “despair” phase where traders rush to exit, often resulting in a rough sell‑off.

Analysts suggest that the continued dip may be driven by broader AI investment uncertainties, as companies reassess capital allocations. Investors are watching closely for any rebound signals, while regulators monitor market volatility.