Korean Stocks Rebound 3% After 10% Plunge as AI Chip Boom Deepens Economic Divide
Updated
Updated · The New York Times · Jun 24
Korean Stocks Rebound 3% After 10% Plunge as AI Chip Boom Deepens Economic Divide
3 articles · Updated · The New York Times · Jun 24
Summary
South Korean stocks rose more than 3% a day after a 10% plunge triggered a global tech sell-off, underscoring how violently AI-driven chip bets are swinging regional markets.
Record chip exports in South Korea and Taiwan are pulling in retail money—from seniors opening brokerage accounts to younger workers chasing trading gains—concentrating the boom in a narrow set of semiconductor names.
Manufacturers outside chips are still struggling with energy and tariff shocks, while household debt and property prices keep rising and both currencies remain weak despite repeated government support.
Economists describe the split as a K-shaped economy: a small, specialized chip sector prospers while much of the broader workforce and industrial base falls behind.
Beyond the AI chip frenzy, what happens to the millions left behind in Asia’s new K-shaped economies?
With 90% of advanced AI chips from one island, how is the world preparing for a potential 'Silicon Shield' failure in Taiwan?
When the KOSPI Fell 10%: South Korea’s AI Chip Surge, Market Volatility, and the Global Wake-Up Call
Overview
In June 2026, South Korea's KOSPI suffered a dramatic 9.99% drop, triggered by a broader selloff in AI and semiconductor stocks across Asia. This downturn quickly spread to global markets, with the Nasdaq Composite also falling sharply. The sudden shift was driven by rising concerns about whether the rapid growth in AI chip demand could continue, as well as changes in semiconductor production toward lower-margin products. As global interest rates rose, investors became more cautious, moving their focus from geopolitical risks to the sustainability of tech spending. This combination of factors led to a sharp correction in tech-heavy markets.