Asia Pacific Stocks Plunge: AI Reset or a Wider Risk-Off Move?

Asia's latest selloff was more than an ordinary red trading session. South Korea's KOSPI fell more than 8% at one point on November 6, triggering a 20-minute circuit breaker. Japan's Nikkei 225 dropped around 6%, while Taiwan's benchmark index lost more than 8%.

The speed of the decline tells us how crowded the technology trade had become. But the bigger question is whether investors are simply reducing expensive AI exposure or beginning to question the wider outlook for Asian markets.

I think both forces are involved.

The AI trade is facing a valuation test

The immediate trigger came from Wall Street. U.S. technology and semiconductor stocks suffered a sharp selloff, with investors questioning whether enormous AI infrastructure investments will generate returns quickly enough to justify current valuations.

There is also a political dimension. Following the U.S. midterm elections, expectations of greater scrutiny around AI development and data-center construction added another layer of uncertainty.

For Asia, this matters because South Korea, Taiwan and Japan are deeply connected to the global semiconductor supply chain. Memory chips, advanced manufacturing, chip equipment and data-center hardware all depend on expectations for future technology spending.

If investors start reducing those expectations, companies can face valuation pressure even when their current earnings remain strong.

Korea: The memory-chip exposure

South Korea experienced one of the most dramatic moves. Samsung Electronics and SK Hynix came under heavy selling pressure, reflecting their importance in the global memory and AI hardware supply chain.

The KOSPI's circuit breaker showed how quickly selling intensified. However, the index recovered part of its early decline, suggesting that buyers were willing to step in after the initial panic.

The important question now is whether institutional and foreign selling continues or whether domestic demand can absorb the pressure.

Japan: Not just a semiconductor story

Japan's decline also reflected technology exposure, but the Nikkei 225 needs to be viewed carefully because its price-weighted structure can make movements in certain high-priced companies disproportionately influential.

That means a sharp index decline does not necessarily tell us that every Japanese industry is experiencing the same level of weakness.

I would watch whether the selling spreads beyond technology and whether the broader market begins stabilizing.

Taiwan: The supply-chain test

Taiwan is particularly important because of its position in advanced semiconductor manufacturing.

TSMC is central to the global AI hardware ecosystem. If investors become less confident about future chip demand or data-center investment, Taiwanese equities can experience significant pressure.

The key distinction is between a temporary reduction in valuation multiples and an actual deterioration in semiconductor demand. Those are very different investment scenarios.

What the charts are telling me

My November 6 charts show weakness across the related assets:

JPN225: Around 57,189, with RSI near 29.26. The market is deeply weak, with 57,360–57,188 an important nearby area to monitor.

SK Hynix: Around 132–134, RSI near 34.24. Support is around 124, while resistance begins near 144–148.

TSM-related chart: Around 369, with RSI near 31.73. The 368 area is nearby support, while 424–435 is an important recovery zone.

Samsung-related chart: Around 182, with RSI near 34.44. Momentum remains weak, so a price bounce alone would not confirm a reversal.

These readings suggest stretched downside conditions, not guaranteed bottoms. The charts are snapshots, and the related USDT instruments should not be confused with the underlying local-market share prices.

My Take

I would not rush to buy simply because these markets have fallen sharply. The first thing I want to see is stabilization in semiconductor stocks, a reduction in forced selling and evidence that AI infrastructure spending expectations remain intact.

My attention is divided between Korea and Taiwan. Korea offers an important view of memory-chip demand, while Taiwan provides a direct look at confidence in advanced semiconductor manufacturing. Japan is also worth watching for signs that weakness is spreading beyond technology.

Which market do you think has the strongest rebound potential: Japan, South Korea or Taiwan?

Not financial advice.

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