On Tuesday, technology shares experienced a significant decline, primarily due to apprehensions regarding the substantial costs associated with developing artificial intelligence systems. Additionally, concerns grew over increased competition from China in the memory chip sector, which has long been dominated by South Korea and its industry counterparts.
The South Korean Kospi index experienced a dramatic drop of over 10 percent, resulting in a temporary trading suspension at one stage. Meanwhile, both Japan and Taiwan's benchmark indexes fell by around 4 percent, while Chinese stocks declined by more than 2 percent.
Futures for the Nasdaq, heavily populated by tech firms, fell by approximately 1 percent. In premarket trading, American chip manufacturer Micron saw its shares decrease by 6 percent, while Nvidia, a leading chip manufacturer, also faced a downturn. SpaceX, the aerospace and AI venture led by Elon Musk, also saw a decline. In Europe, German chip producer Infineon fell by 4 percent, and Dutch semiconductor equipment manufacturer ASML dropped by 3 percent.
The recent turmoil in the AI market took off on Monday, sparked by the trading debut of ChangXin Memory Technologies, China's top memory chipmaker, which launched with an extraordinary initial public offering. The company's shares surged almost 500 percent on their first day, quickly making it the most valuable entity on the Shanghai stock exchange, although it retraced by 4 percent on Tuesday.
