By Sherry Qin

Asian stocks were mostly lower early Tuesday with South Korea again leading the losses, as the chip-led artificial-intelligence rally takes a breather.

Seoul's benchmark stock index was dragged 5.9% lower by heavyweight chip-makers Samsung Electronics and SK Hynix, which tumbled 8.4% and 7.5%, respectively.

Samsung lost ground even though it projected a 19-fold surge in its second-quarter operating profit, signaling that its record earnings streak will continue amid insatiable AI-related demand.

Analysts noted that Korean stocks' latest correction should be viewed in the context of its recent historic rally. Some investors appear to be cashing in their gains after the Kospi's roughly 100% surge in the first half of the year.

"Investors are not walking away from the AI story, but they are asking whether a sector priced for perfection can keep delivering perfection into earnings season," Tickmill Group analyst Patrick Munnelly said.

Japan's Nikkei Stock Average, another beneficiary of the AI trade, declined 1.3% as Tokyo Electron shed 2.45% and Kioxia Holdings dived 11%.

Hong Kong's Hang Seng Index was flat while Singapore's FTSE Straits Times Index added 0.8%.

Oil prices were slightly higher in wake of news that Iran's Islamic Revolutionary Guard Corps had fired missiles at two commercial ships near the Strait of Hormuz early Tuesday, according to a senior U.S. official.

Although the attack would complicate negotiations to end the U.S.-Iran conflict, its impact was limited as Saudi Arabia has sharply cut the price of its flagship crude grade for Asian buyers, selling it at a discount for the first time in years as Gulf supplies return to global markets.

ANZ analysts reckon that despite the recent surge in activity in the Strait, the recovery in oil flows is proving to be slower than expected as shipping operators remain cautious, limiting the speed at which crude exports can return to normal levels.

Front-month WTI crude oil futures were 0.7% higher at $69.03 a barrel, while Brent crude oil futures also gained 0.7% at $72.51 a barrel.

Write to Sherry Qin at sherry.qin@wsj.com