Trading was temporarily halted on the Kospi as the index fell to its lowest level since April of this year and ended up closing 10.8% lower at 6,023.66.
Shares of chipmaker Samsung Electronics (SSNLF) sank 13% while SK Hynix’s stock dropped 14%.
A day earlier, SK Hynix's U.S.-listed shares fell below their $149 U.S. initial public offering (IPO) price, closing at $143 U.S. a share.
Driving the selling of A.I.-related stocks are worries that rising competition from Chinese A.I. startups and chipmakers might undermine U.S. companies.
A 466% jump in the price of Chinese memory chipmaker CXMT (SHA: 688825) in its trading debut on the Shanghai exchange heightened the concerns.
Elsewhere in Asia, Tokyo's Nikkei 225 index fell 4% to 62,364.92 on the day. The Shanghai Composite index lost 1.2% to close at 3,813.31.
Taiwan’s Taiex declined 5%, with shares of leading chipmaker Taiwan Semiconductor Manufacturing Co. (TSM) dropping 3%.
In the U.S., shares of several major chipmaking stocks fell on July 27, pulling the Nasdaq Composite (NDAQ) index lower.
Shares of Advanced Micro Devices (AMD) sank 5.2%, while Nvidia (NVDA) fell 5% and Micron Technology (MU) lost 2.3%.
Investors and analysts are growing increasingly worried about the amount of money leading U.S. technology companies are spending on A.I.
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