The KOSPI, the main index in Seoul, was down 2.0 percent in early trading.
The index shed 138.63 points to 6,650.25.
Tokyo took the same blow. The Nikkei 225 was down 1,375.83 points at 65,029.73. The fall of about 2.1 percent left the region's two big chip-exposed markets moving together.
Samsung Electronics fell 3.0 percent to 249,250 won ($181) and SK hynix lost 3.1 percent to 1,602,000 won ($1,163). They are the two heaviest weights in the index and the clearest expression of what traders were selling.
The damage spread through the chip supply chain rather than the whole market. Samsung Electro-Mechanics dropped 3.4 percent to 1,373,000 won ($997). SK square, the holding company whose main asset is its SK hynix stake, fell 2.9 percent to 998,000 won ($724).
Warsh told the Fed's annual Jackson Hole symposium on Friday that the central bank would have work to do if policymakers were not confident inflation was returning to its 2 percent target. Bets on a September increase jumped to 55.7 percent from 35.4 percent the day before, according to the FedWatch tool of Chicago Mercantile Exchange (CME) Group.
Higher-for-longer rates hit the most expensive growth assets hardest, and in Seoul that means memory chips.
Bank stocks benefited from the expectations of a tightening cycle. KB Financial Group rose 1.1 percent to 173,500 won ($126) and Shinhan Financial Group added 0.6 percent.
LG Energy Solution gained 1.2 percent to 374,500 won ($272) as battery and refining names ran against the tape.
Doosan Enerbility was the worst large-cap performer, down 4.5 percent at 84,200 won ($61). The power plant and nuclear equipment builder has been one of the market's momentum favorites this year.
Foreign investors sold a net 247.2 billion won ($179.4 million) and institutions sold 143.2 billion won ($104.0 million). Individuals bought 327.1 billion won ($237.5 million), absorbing both.
The KOSDAQ, the secondary board weighted toward smaller technology and biotech companies, fell harder than the main board, down 2.9 percent at 814.04.
The KOSPI closed last week at 6,788.88 after repeatedly failing to hold above 7,000, a level it has approached and lost several times this month.
The won traded at 1,377.50 per dollar, marginally stronger than Friday.
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