South Korea’s Kospi Slides as Chip Stocks Lead Broad Selloff

what happened

South Korean stocks fell sharply Tuesday, with a semiconductor-led selloff prompting a temporary trading halt, Newsmetry API reported. Investor concerns about stronger competition from Chinese chip makers, including ChangXin Memory Technologies, or CXMT, weighed on the sector alongside overnight losses among U.S. peers. LS Securities analyst Kim Yun-jeong said AI and technology shares, including memory-chip companies, were under pressure after CXMT’s advances in DRAM technology.

Over the weekend, CXMT introduced a chip design that reduces cell area by around 30% and said it plans to launch a product using the structure by the end of 2026. The Kospi was down more than 7% in Tuesday morning trading, moving below 6000 for the first time since late July. The index was last 7.1% lower at 5934.47. Korea Exchange briefly halted trading to contain excessive volatility, the first suspension of its kind in two months.

Samsung Electronics and SK Hynix led the decline. The companies are the world’s two largest memory-chip makers, and their combined market capitalization represents nearly half of the Kospi’s total value. Their shares fell almost 9% and 10%, respectively, in early trading. The retreat in Seoul followed a wider global decline in chip stocks, with the Philadelphia Semiconductor Index losing 2.7% overnight.

Anxiety surrounding AI also remained in focus. At the DBS Asia Future Forward Conference in Singapore on Monday, Broadcom Chief Executive Hock Tan likened many AI investors to casino gamblers. “A lot of investors have no clue what they are investing in,” Tan said, adding that they “set very extreme expectations only to find out that it’s almost like they are in a casino.” Foreign investors appeared more cautious than retail and institutional participants in Seoul, with offshore investors’ heavy net selling outweighing local buying. The report was written by Kwanwoo Jun at kwanwoo.jun@wsj.com.

why it matters

The decline hit a market segment with an unusually large weight in the Kospi, as Samsung Electronics and SK Hynix together account for nearly half of its capitalization. The trading halt underscores the scale of intraday volatility, while CXMT’s plans keep competitive pressure in focus.

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