The South Korean stock market plummeted by 20%, approaching a bear market, and the AI boom encountered the embarrassment of "the more explosive the performance, the more severe the decline" BlockBeats News: On Wednesday afternoon, July 8th, the decline in the South Korean stock market widened, and investors re evaluated the outlook for AI demand. The KOSPI index fell more than 6% at one point, falling below 7200 points, and has fallen more than 20% from its historical high last month, indicating a potential technical bear market. Storage chip manufacturer SK Hynix fell 5% at one point, while Samsung Electronics fell 6.9%. The Korean stock exchange has initiated a "temporary suspension" mechanism for the KOSPI index, suspending programmatic trading. The South Korean stock market was once one of the strongest performing markets in the world this year, but its market is highly dependent on SK Hynix and Samsung Electronics, and fluctuations are amplified when sector sentiment weakens. Despite Samsung Electronics announcing a 19 fold surge in quarterly profits earlier this week, chip stocks continue to face pressure. Jordan Klein, an expert in the TMT sector at Mizuho Securities, stated that investors have overreacted to Samsung's initial Q2 performance. He believes that the current sell-off in semiconductor stocks is more like a loss of momentum rather than a deterioration of fundamentals. Klein stated that if one-time bonus expenses are excluded, Samsung's operating profit actually significantly exceeds expectations, and its storage business's implied operating profit margin may exceed 80%. He stated that Samsung's quarterly operating profit has exceeded the total of the past three years, and it is extremely short-sighted to react to Samsung's stock price based solely on preliminary performance. At the same time, there has been a rotation of AI trading in the Asian market. Hong Kong listed Chinese stocks rose, with the Hang Seng China Enterprises Index rising by 3.4% at one point, the Hang Seng Technology Index rising by over 5% during trading, Alibaba rising by over 8%, and Tencent rising by over 3%. Market participants believe that funds are flowing from crowded trading focused on AI infrastructure to markets with lower valuations and more valuable stock characteristics. The Reuters report on DeepSeek's self-developed chip and The Information's report on Zhipu AI considering designing its own AI chip have further driven this round of rotation. (Golden Ten)