Brokerages view selloff as sentiment-driven, citing intact AI spending cycle A financial data screen at Woori Bank's dealing room in central Seoul shows the benchmark Kospi standing at 7,972.17, down 3.99 percent from the previous session, during intrady trading on Thursday. (Yoon Chang-bin/The Korea Herald) South Korea's benchmark Kospi fell below the 8,000-point threshold during trading on Thursday, tracking an overnight sell-off in US technology stocks as investors grew increasingly concerned about a slowdown in chip demand.The index opened at 7,933.1, down 4.46 percent from the previous session, as foreign investors accelerated selling in heavyweight chipmakers Samsung Electronics and SK hynix.The Kospi extended losses to as much as 5.91 percent to 7,723.57 shortly after the opening bell, triggering a sell-side sidecar, a five-minute trading curb, at 9:07 a.m. amid heavy selling pressure. It later pared some losses to trade at 7,924.71, down 4.56 percent, as of 2 p.m.The sell-off followed a sharp rout in US semiconductor stocks overnight, with Micron Technology tumbling 10.57 percent, while Intel and AMD fell 9.03 percent and 6.89 percent, respectively, dragging the Philadelphia Semiconductor Index down 6.27 percent.The decline was sparked by a Bloomberg report that Meta Platforms was considering launching a cloud business to sell excess AI computing capacity, fueling concerns that Big Tech's AI spending boom may be easing and that chip demand could be approaching a peak.Concerns over slowing chip demand battered Korea's top chipmakers, sending Samsung Electronics down 6.84 percent to 293,000 won ($188) and SK hynix 8.01 percent lower to 2.355 million won as of 2 p.m.The sell-off extended beyond chipmakers. SK Square slid 8.94 percent to 1.6 million won, while Samsung Electro-Mechanics lost 8.48 percent to 201,800 won. Selling was also heavy among semiconductor materials, parts and equipment suppliers.Retail and institutional investors bought a net 3.31 trillion won and 1.09 trillion won worth of shares, respectively, but failed to offset foreign selling, with overseas investors unloading a net 4.52 trillion won on the main board.Foreign investors have been heavy net sellers on the Kospi this year, offloading 148.3 trillion won in shares during the first six months.Samsung Electronics accounted for 72.6 trillion won of those outflows, while SK hynix made up another 57.1 trillion won. Combined net sales of the two chipmakers totaled 129.7 trillion won, representing about 87 percent of all foreign net sales in the first half.Selling pressure spread to the tech-heavy Kosdaq in afternoon trading. The exchange activated a sell-side sidecar at 12:47 p.m. after the junior index tumbled more than 5 percent.The Kosdaq stood at 881.27, down 5.17 percent, as of 2 p.m.Despite the sell-off, analysts said the market reaction appeared excessive, arguing that the latest developments did not signal a meaningful slowdown in AI infrastructure investment."We believe the concerns sparked by Meta's reported plans are somewhat overdone," said Jo Ah-in, analyst at Samsung Securities."The recent volatility in semiconductor stocks reflects shifting investor sentiment driven by differing interpretations rather than any material deterioration in fundamentals."Kim Young-gun, analyst at Mirae Asset Securities, said the recent pullback presents a buying opportunity for semiconductor stocks, citing the long-term AI investment cycle as remaining intact."There remains significant room for Big Tech companies to further expand their AI infrastructure spending," Kim said.Brokerages also highlighted several upcoming events that could support semiconductor stocks, including Samsung Electronics' preliminary second-quarter earnings announcement on July 7, SK hynix's planned listing of American depositary receipts in the US on July 10, the company's earnings release on July 29 and quarterly earnings reports from the so-called Magnificent Seven technology companies later in July.