A sudden market shock in South Korea has raised fresh concerns about the stability of the global artificial intelligence ecosystem. While the technology sector has long focused on semiconductor shortages, supply chains and geopolitical tensions around chip manufacturing, the recent turmoil suggests that energy supply could become an equally critical risk for the future of AI.
The warning emerged after the country’s benchmark KOSPI index dropped about 15% within 48 hours, wiping out nearly $270 billion in market value. Trading was halted through circuit breakers for the first time in more than 1.5 years, highlighting the scale of the market volatility. The selloff was led by semiconductor leaders Samsung Electronics and SK Hynix, whose shares declined around 10% and 12% respectively. The market reaction came as oil prices rose above $80 per barrel amid growing geopolitical tensions in the Middle East and concerns over disruptions to shipments passing through the Strait of Hormuz.
For analysts closely tracking the AI sector, the incident exposed a deeper connection between energy markets and semiconductor production. Modern artificial intelligence systems rely on advanced processors such as Blackwell GPUs, H100 accelerators, and custom chips developed by companies like Google. However, these processors require high-speed memory to function efficiently. Much of that memory is produced in South Korea, where Samsung and SK Hynix together account for nearly 2/3 of global DRAM production and almost 80% of revenue from high-bandwidth memory (HBM). HBM plays a critical role in AI data centres because it feeds massive amounts of data to GPUs at the speeds required for modern machine learning workloads. As one market analyst explained, HBM has become the “oxygen of the global AI infrastructure buildout.”
Energy supply forms another crucial layer of this system. Semiconductor fabrication plants operate continuously and require enormous amounts of electricity to maintain controlled environments for chip production at nanometer scale. South Korea imports about 97% of the energy it consumes, much of it as oil and liquefied natural gas from the Middle East. A large portion of these shipments passes through the Strait of Hormuz, which at its narrowest point is about 21 miles wide. Any disruption to shipping routes could push energy prices higher, increasing production costs for chip manufacturers. At the same time, industry inventories offer limited protection, with global DRAM stocks covering roughly 2–3 weeks of supply and NAND flash inventories lasting only 3–4 weeks. During the market turbulence, defense firms such as Hanwha Aerospace and LIG Nex1 moved in the opposite direction, with their shares rising about 20% and 30% respectively. Analysts say the event highlights how energy routes, logistics and geopolitical stability could play a major role in shaping the future expansion of artificial intelligence worldwide.
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