Wall Street's chip rout hit Asia harder: Kospi and Nikkei fell 6% in a day

What happened

A day after the worst session on Wall Street since April 2025, Asian markets fell even harder. South Korea's Kospi dropped more than 8% at Friday's open, triggering a 20-minute trading halt, and closed 6.0% lower at 5,059.69. Japan's Nikkei 225 fell 5.96% to 57,435, its first close below 60,000 in about six months, ending its worst week since 2020. Taiwan's market fell more than 8% at one point.

Chip and AI-linked companies led the fall. Samsung Electronics lost nearly 10% and SK hynix about 12%, WION reported. In Tokyo, memory maker Kioxia fell 14% and SoftBank Group 11%, and every one of the broader Topix index's 33 sectors fell.

Why Asia fell harder than Wall Street

A stock index is only as diversified as the companies in it. In Seoul and Taipei, a handful of chipmakers account for a very large share of the market's value. When investors sell AI-related shares, those indices fall more than broader ones like the S&P 500. The same companies have been the main source of gains this year, which also means more profit to take.

The trigger was the same as in New York: worries that the new Democratic majority in Congress, and local votes against data centres in several US states, could slow the AI build-out, together with funds selling the year's winners.

Why it matters for the real economy

For South Korea, the exposure goes beyond the stock market. Chips made up almost half of its record October exports, and chip profits support investment, tax revenue and the won. If AI spending slowed, the effect would show up in trade figures and growth, not only share prices. Japan's exposure is different: its market includes many chip-equipment makers and big AI investors such as SoftBank.

Where it sits in the chain

This is Link 4, financial markets, with a clear route to Link 5: in an economy as concentrated as Korea's, a shock to one industry quickly becomes a shock to growth.

What to watch

• Whether chip stocks stabilise this week, after Friday's partial rebound on Wall Street.
• The first 10 days of Korea's November exports.
• Japan's third-quarter GDP, due on 16 November.