[Anchor]

Amid persistent skepticism regarding AI investments, the KOSPI index plunged once again today (July 20), falling to the 6,500 level. This time, concerns have emerged that demand for semiconductors could decline due to 'Kimi K3,' a high-performance artificial intelligence Model developed by a Chinese startup.

Reporter Lee Tae-gwon has the story.

[Reporter]

With the 38th sidecar of the year triggered, the KOSPI closed down 4.4% at 6,516.

The index has returned to the level it was at three months ago.

Leading the market decline were concerns over a peak in the semiconductor industry that swept through the U.S. stock market during the Constitution Day holiday.

Taiwanese semiconductor foundry TSMC announced strong second-quarter earnings and plans to increase its facility investment, which the market interpreted as an expansion of supply.

[Lee Kyung-min / Researcher at Daishin Securities: (TSMC's) plan to expand investment is being interpreted as: if supply increases, prices will fall and earnings will decline. There is a sentiment that such trends might be returning....]

The AI Model 'Kimi K3,' released for free by the Chinese startup Moonshot, also shocked the market.

It has been evaluated as delivering performance close to the top-tier models from U.S.-based OpenAI and Anthropic at a relatively lower cost.

Just as when China's AI company DeepSeek appeared last year and Google's TurboQuant emerged this year, concerns that semiconductor demand would decrease have gripped the market.

[Kim Jae-seung / Researcher at Hyundai Motor Securities: Since it has reached a point where even frontier models are being done well by China, concerns are growing that the massive cash flow currently generated by big tech companies might not be sustainable.]

However, some analysts suggest that investment demand could actually increase.

[Hwang Soo-wook / Researcher at Meritz Securities: (Chinese AI) high-performance models will ultimately require U.S.-made, premium-line AI GPU server racks....]

While the KOSPI showed significant volatility again today, trading of single-stock leveraged ETFs, which has been cited as a factor in increased volatility, rose by 159 billion won to maintain the 12 trillion won level, despite the authorities' announcement of supplementary measures on July 16.

The market is paying the closest attention to the scale of facility investment that will be revealed in the earnings reports of major big tech companies, starting with Google's Alphabet this Thursday.

(Video reporting: Shin Jin-soo, Video editing: Park Na-young, Design: Kim Ye-ji)