Seoul Stock Exchange Plunges as AI Chip Slump and Elice IPO Collapses
Seoul Stock Exchange plunges nearly 40% from its June peak as AI chipmakers slump and AI infrastructure firm Elice suffers a disastrous 32% debut on its first trading day.
Seoul Stock Exchange plunges nearly 40% from its June peak amid a massive sell-off in AI chipmakers and a disastrous debut for data center infrastructure firm Elice. Elice shares collapsed by 32% on their first trading day in Seoul, marking one of the worst IPOs in South Korean market history for a company of its scale.
Chipmakers and Market Slump
South Korean chip giants Samsung and SK Hynix account for roughly 50% of the total market capitalization on the Seoul exchange, making the market highly vulnerable to shifts in the semiconductor sector. Following Wall Street's recent jitters over the massive debt accumulated by AI companies, South Korean chip stocks extended losses, dragging the local exchange down by about 3.7%.
A Disastrous IPO for Elice
Despite boasting a 389-fold oversubscription during its initial public offering, AI infrastructure provider Elice suffered a devastating 32% crash on its debut. According to MarketWatch, the IPO price valued the company at approximately 1 trillion South Korean won (around $750 million), but the steep drop wiped out about 344 billion won ($250 million) of its market value.
MarketWatch reports that Elice purchases Nvidia chips, assembles them in data centers, and leases out computing capacity on an hourly basis. Reuters noted that the company's first-half revenue tripled to 34 billion won ($25.5 million), while its operating income swung from a loss of 3.5 billion won ($2.6 million) to a profit of 10 billion won ($7.5 million).
Timing and Future Offerings
Reuters reported that Elice's IPO price was fixed on October 6, just before the broader sell-off in AI stocks.
The conclusion is simple: the timing is bad. The latest wave of selling in chip stocks has battered investor appetite, and the weak IPO is definitely a warning sign for other offerings in the AI sector.
said Ipek Ozkardeskaya, an analyst at Swissquote, to Reuters. Markets are now closely watching upcoming mega-offerings from key AI ecosystem players Anthropic and OpenAI, with Anthropic targeting a mid-November debut and OpenAI postponing its planned public offering to 2027 amid ongoing safety concerns.
