South Korean shares cratered more than 8% on Friday, forcing regulators to halt trading for the second time this week as concerns mounted over sky-high valuations of AI-driven chip manufacturers. The benchmark Kospi tumbled 8.1% in afternoon trading, wiping out previous gains and rattling a market that has been the world's best performer this year.

The selloff zeroed in on Samsung Electronics and SK Hynix, which together represent more than half the Kospi's market value and have been locked in a fierce battle for the title of South Korea's most valuable company. Samsung fell 7.7% and SK Hynix dropped 9.2%, extending wild swings that have made these semiconductor giants resemble meme stocks rather than blue-chip tech giants.

The volatility reflects broader anxieties about the sustainability of AI-related gains, compounded by Apple's decision to raise prices on Macs and iPads earlier in the week. Those moves rattled investors worried about demand for the chips powering the AI boom. The sell-off spilled into Japan, where the Nikkei dropped 4.8% and SoftBank Group plunged 13% as traders priced in weaker prospects for the AI trade.

For now, the market is retreating from its AI-fueled highs, with some analysts pointing to rampant speculation and heavy margin borrowing as accelerants behind the sudden reversal.