(LEAD) Seoul shares dip over 3 pct on tech sell-off amid AI concerns

Seoul shares plummeted more than 3 percent on Friday, following a sharp decline in semiconductor stocks due to lingering concerns about the viability of artificial intelligence (AI) investments. The Korea Composite Stock Price Index (KOSPI) fell 206.92 points, or 3.48 percent, to close at 5,730.74. The Korean won strengthened against the U.S. dollar, reaching 1,334.3 won per dollar by 3:30 p.m. The sell-off began early, with the KOSPI 200 Futures Index falling 5 percent or more for at least one minute, triggering a sell-side sidecar.

This sell-off followed a negative start to the week on Wall Street, where worries over high AI-related valuations dampened investor confidence. Alphabet, the parent company of Google, saw its shares drop over 12 percent after revenue for the third quarter fell 25 percent year-over-year to $127.58 billion, falling short of market expectations.

This raised doubts about the returns from substantial AI investments. The tech-focused Nasdaq Composite Index fell 1.38 percent, while the Philadelphia Semiconductor Index dropped 1.4 percent, affecting the outlook for South Korean chipmakers. Trading activity was light, with 212.76 million shares changing hands, worth 19.27 trillion won ($14.44 billion), and more shares declined than advanced - 655 to 232.

Many KOSPI heavyweights posted losses, including Samsung Electronics, which fell 3.02 percent to 225,000 won, and SK hynix, which dropped 7.08 percent to 1.42 million won. Large automaker Hyundai Motor declined 3.59 percent to 282,000 won after cutting its annual sales forecast and investment plans. Its sister company, Kia, saw a 11.73 percent drop to 95,600 won following weaker-than-expected profit.

Defense firm Hanwha Aerospace also suffered, falling 8.42 percent to 696,000 won after reporting lower-than-expected earnings due to delays in delivering K9 self-propelled howitzers to Poland.