On the 20th, the KOSPI opened down 4% amid an "artificial intelligence (AI) shock" that swept through during the holiday. Although TSMC posted record-high results, concern spread that U.S. big techs' AI capital expenditures (CAPEX) could decline after Chinese AI startup Moonshot unveiled "Kimi K3."
As of 9:03 a.m. that day, the KOSPI index was trading at 6,587.55, down 233.05 (3.42%) from the previous trading day. The index opened down 4%, but bargain hunting is trimming losses.
Foreign investors and institutions are net sellers of 133.7 billion won and 36.9 billion won, respectively. Individuals alone are net buyers of 168.7 billion won.
Samsung Electronics(005930) and SK hynix are down 3%. They are each trading around 240,000 won and 1.7 million won. Most large-cap stocks by market capitalization are falling.
U.S. stocks fell for a second straight session last week. The Dow Jones Industrial Average fell 0.77% to 52,156.39, the Standard & Poor's (S&P) 500 dropped 1.01% to 7,457.69, and the Nasdaq composite lost 1.40% to 25,520.24.
Taiwan semiconductor company TSMC reported results that beat market expectations, but selling emerged as the market interpreted the capex increase as an expansion of supply. TSMC posted second-quarter revenue of $40.2 billion and a gross margin of 67.7%. Capital expenditures (CAPEX) were raised from $52 billion–$56 billion to $60 billion–$64 billion.
Chinese AI startup Moonshot's release of its next-generation open-source AI model "Kimi K3" further dampened investor sentiment. Kimi K3 is the world's first open-source large language model (LLM) with around 3 trillion parameters, larger than Anthropic's top model "Claude Opus," which the industry estimates at about 1.5 trillion.
Kim Joo-yeon, an analyst at Mirae Asset Securities, said, "Concerns have been raised that even with low costs, one could get close to the highest level of U.S. AI technology," and noted, "As the possibility of revising U.S. big techs' massive capital expenditure (capex) strategies has been raised, it triggered a market decline centered on beneficiaries of expanded AI infrastructure investment."
Global tightening fears were reignited as oil prices surged on U.S.-Iran tensions. During the holiday, news emerged that two oil tankers passing through the Strait of Hormuz were hit by explosions in a mine-laying area. Brent for September delivery and West Texas Intermediate (WTI) climbed to around $90 and $83, respectively.
At the same time, the KOSDAQ index was trading at 772.06, down 19.78 (2.5%). While individuals are net sellers of 9.3 billion won, foreigners and institutions are net buyers of 5.3 billion won and 4.0 billion won, respectively, helping to limit the decline.