The benchmark KOSPI fell 3.9 percent to 5,464.10 as of 11 a.m, after trading between 5,386.29 and 5,586.46.
Foreign investors sold 1.26 trillion won ($938.1 million) worth of shares, while retail investors bought a net 1.13 trillion won. Institutions purchased 33.1 billion won, but the buying failed to offset the foreign-led selloff.
The decline came despite strong gains on Wall Street Wednesday following the U.S. midterm elections.
The Dow Jones Industrial Average surged 3.03 percent, while the S&P 500 gained 1.58 percent and the Nasdaq Composite rose 1.44 percent as investors welcomed reduced political uncertainty.
However, semiconductor shares weakened amid concerns that Democratic control of Congress could lead to tighter regulations on AI data center construction and electricity consumption.
The Philadelphia Semiconductor Index fell 3.13 percent, reflecting continued uncertainty over the outlook for AI infrastructure spending.
SK hynix dropped 6.95 percent to 1,299,000 won, while Samsung Electronics fell 5.62 percent to 205,750 won.
Samsung Electro-Mechanics plunged 10.4 percent to 999,000 won, while SK Square, a major shareholder in SK hynix, declined 6.79 percent to 838,000 won.
Samsung Electronics' preferred shares slipped 4.37 percent to 164,200 won.
The losses extended to semiconductor-related electronic components, as investors reassessed the growth outlook for companies supplying AI infrastructure.
Samsung SDI fell 4.22 percent to 522,000 won, while Hanwha Solutions declined 2.32 percent to 27,350 won.
Despite the sharp losses in technology shares, several sectors moved higher.
Pharmaceutical stocks advanced, with Celltrion rising 7.25 percent to 214,500 won and Hanmi Pharmaceutical jumping 11.2 percent to 471,000 won.
Samsung Biologics gained 2.2 percent to 1,528,000 won, contributing to a broader advance in healthcare shares.
Telecommunications stocks also outperformed the market, with KT gaining 4.5 percent to 51,300 won and Sejong Telecom rising 2.4 percent to 7,650 won.
Airline-related shares posted gains, led by Jeju Air, which climbed 11.1 percent to 6,540 won.
Korean Air rose 1 percent to 29,950 won, while Hanjin KAL edged up 0.7 percent to 185,600 won.
Entertainment stocks also attracted buying interest. Kakao jumped 8.4 percent to 31,550 won, while HYBE gained 7 percent to 147,800 won.
Precious metals-related shares advanced, with Korea Zinc rising 9.1 percent to 972,000 won.
Elsewhere on the KOSPI, Hyundai Motor gained 4.59 percent to 296,500 won, while Naver climbed 7.26 percent to 183,200 won.
The tech-heavy KOSDAQ fell 4 percent to 686.34, after trading between 679.97 and 717.06.
Foreign investors sold 145.3 billion won worth of shares, as institutions unloaded 4.5 billion won. Retail investors bought 147.8 billion won.
Semiconductor equipment and component stocks were among the biggest decliners.
Simtech plunged 14.47 percent to 105,200 won, while Jusung Engineering dropped 8.92 percent to 152,200 won.
Wonik Holdings fell 6.48 percent to 28,150 won, and EcoPro declined 5.2 percent to 72,900 won.
AI-related company AST also came under pressure, falling 16.48 percent to 8,260 won.
By contrast, Alteogen gained 5.64 percent to 215,500 won, while MS Bio surged 17.9 percent to 7,310 won.
Daemyung Energy rose 9.45 percent to 15,050 won, while Daedong Gear jumped 10.93 percent to 6,900 won.
Throughout Asia, Japan's Nikkei 225 slipped 0.6 percent to 61,847.6, while China's Shanghai Composite edged lower.
Hong Kong's Hang Seng Index bucked the regional weakness, surging 2.8 percent to 24,584.2.
The Korean won weakened 0.04 percent to 1,343.1 won per dollar.
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