The story

South Korea's Kospi index plunged 10.8% on Tuesday, closing at 6,023.66, its lowest level since April. Trading was temporarily halted at times as shares in chipmaker Samsung Electronics sank 13.4% and SK Hynix tumbled 14.7%. Most other Asian markets also fell, with Tokyo's Nikkei 225 down 3% to 4% and Taiwan's Taiex falling 3.8% to 3.9%.

Analysts said a key factor driving the selling is the expectation that competition from Chinese AI startups and chipmakers might undermine gains for global companies. A 466% jump in the price of Chinese chipmaker CXMT in its trading debut Monday underscored such concerns. CXMT raised at least $8.6 billion in its initial public offering on Shanghai's tech-oriented STAR exchange. According to Barchart, a report in The Information said China has begun mass production of homegrown deep ultraviolet chipmaking tools.

U.S. chip stocks also fell sharply. Micron Technology dropped 8.4% to 8.9% and was the heaviest weight on the S&P 500. Advanced Micro Devices fell 7.4% to 8.1%, and Applied Materials dropped 7.5% to 7.8%. The S&P 500 rose 0.2% to 7,428.78, the Dow Jones Industrial Average jumped 1% to 52,747.32, and the Nasdaq composite slipped 0.2% to 24,876.91. The broader U.S. market rose after companies like Coca-Cola, Sherwin-Williams, and Illinois Tool Works reported stronger earnings than analysts expected.