Japan's Nikkei enters correction, Kioxia loses $181 billion as AI sector selloff hits chip stocks

What happened

On Friday July 17, 2026, Japan's Nikkei 225 fell more than 10% from its June 25 peak — a technical correction. Kioxia, a NAND flash chipmaker, lost more than half its market value from its all-time high, erasing $181 billion.

Context and impact

The trigger was Kimi K3's debut — a Chinese open-weight model with 2.8 trillion parameters proving AI development continues despite US export controls. Investors are questioning whether the AI rally was justified and whether chip companies will continue to benefit or be undercut by cheap Chinese AI.

Details

• Nikkei correction: >10% below June 25, 2026 peak
• Kioxia loss: $181 billion in market value from all-time high
• Catalyst: Kimi K3 launch — investors called it 'a new DeepSeek moment'
• Chinese AI stocks: posting >1,000% YoY profit gains, yet their own markets stagnate
• Japan's exposure: Japan is a hub for NAND and memory chips — directly sensitive to AI demand shifts