KOSPI was by far the worst performer on deep losses in heavyweight chipmaking stocks, while Nikkei 225 also tumbled on tech losses

Asian stocks dropped sharply on Monday with technology and artificial intelligence stocks leading declines as investors collected big profits from a major rally in the sector.

KOSPI was by far the worst performer on deep losses in heavyweight chipmaking stocks, while Nikkei 225 also tumbled on tech losses.

KOSPI index was by far the worst performer in Asia, tumbling as much as 8.8% on sharp losses in chip heavyweights.

Samsung Electronics Co Ltd and SK Hynix Inc – the two memory chip makers that had driven a bulk of the KOSPI’s recent gains– declined 4.7% and 1.1%, respectively. SK Hynix’s losses were limited by the company announcing an advanced chips tie-up with AI major NVIDIA Corporation.

Gains in tech saw the KOSPI largely outpace stock markets across the world so far this year, although this also left the sector vulnerable to profit-taking.

Nikkei 225 index slipped 3.6%, pressured chiefly by losses in tech majors as investors questioned whether the AI tech rally had gone too far.

Tech major SoftBank Group Corp. slipped 7.5% and was among the biggest weights on the Nikkei, while chipmaking majors including SUMCO Corp. and Renesas Electronics Corp slipped over 10% each.

TOPIX index slipped 2.7%, also spooked by a downward revision in gross domestic product figures for the first quarter.

Japan’s economy grew 1.8% in the first quarter, lower than prior estimates of 2.1%, pressured chiefly by cooling business spending, data showed on Monday.

The print raised some questions over the impact of the Iran war on growth, and also saw investors questioning whether the Bank of Japan will have enough headroom to raise interest rates next week.

Beyond tech, broader Asian markets dropped on Monday.

Oil prices increased sharply, further spooking Asian markets. Shanghai Shenzhen CSI 300 and Shanghai Composite indexes declined 1.6% and 1.2%, respectively, while Hang Seng dropped 1%.

Straits Times index shed 1.2%. Futures for Nifty 50 index added 0.3% after the Nifty logged deep losses last week.