Asian markets faced intense selling pressure on July 28, 2026, as a deepening slump in semiconductor stocks dragged regional indices lower. South Korea's KOSPI tumbled over 10%, its steepest drop since March 2020, with tech and chipmaking shares bearing the brunt. The downturn was fueled by worries about circular AI investments, highlighted by Nvidia's latest acquisition, alongside reports that China had made a major advance in producing advanced chipmaking equipment. Meanwhile, oil prices kept falling on growing hopes for US-Iran negotiations, with President Trump signaling optimism about a possible agreement, though Iran's denial of formal talks dampened expectations. The cheaper crude offered some comfort to import-dependent Asian economies, but the tech rout dominated sentiment.
Investors are now questioning whether the massive spending on AI by companies such as Nvidia is sustainable or if it is inflating a bubble. Volatility in US semiconductor shares has spread to Asia, hitting major players like Samsung and TSMC with significant losses. If the reported Chinese breakthrough in DUV technology is confirmed, it could speed up the fragmentation of global tech supply chains and alter competitive dynamics.