An electronic signboard at Seoul's Hana Bank shows the benchmark KOSPI closing at 2,535.93 points, Monday, down 8.35 points or 0.33 percent from the previous session. Yonhap

Samsung Electronics and SK hynix are retreating sharply on the benchmark KOSPI, fueling concerns that they are negatively affected by the global chip cycle that is believed to be nearing its peak.

Samsung Electronics finished at 67,500 won ($50.38), Monday, losing 1.89 percent from the previous session's close and extending its losing streak for five consecutive trading days.

Monday's performance was also far below 87,800 won, July 10, when the country's largest semiconductor manufacturer recorded its annual high.

For SK hynix, it went up just 0.38 percent to finish at 157,000 won, Monday. The company, however, has mostly been staying within the 150,000 won range this month, which has disappointed investors as it went as high as 241,000 won on July 11.

The company's performance was especially disappointing considering it is the memory chip supplier for Nvidia, a U.S.-based artificial intelligence (AI) chip giant.

"The lackluster performances of Samsung Electronics and SK hynix are linked to the global chip cycle, which is possibly near its peak and may lose momentum," a market observer said.

Another observer speculated that the global chip cycle may face a downturn, driven by the "overinflated AI bubble."

For instance, shares of Nvidia, which dominates the market for AI-related hardware, lost 9.5 percent, Sept. 3.

The decline translated into a $279-billion decline in market value, the steepest drop in value of any U.S. stock in a single day.

Nvidia's fall impacted the broader semiconductor sector, with Broadcom falling by 6.16 percent and Intel dropping by 8.80 percent.

Meanwhile, some market experts said whether the global chip cycle will enter a downturn will highly depend on the U.S. economy.

The benchmark KOSPI closed at 2,535.93 points, Monday, down 8.35 points or 0.33 percent from the previous session. The tech-heavy junior Kosdaq, meanwhile, rose 1.11 percent to 714.46 points.