Samsung Electronics and SK Hynix shares plunged over 7% each on August 3, erasing a massive 17% surge in the Kospi index from just three days earlier. The sharp reversal dragged the Kospi down by 5%, and knocked 1.1% off the MSCI emerging markets index, highlighting how South Korean chipmakers dominate EM market moves.
The dramatic swings stem from concerns about the sustainability of AI-driven demand for memory chips, which Samsung and SK Hynix supply at a near two-thirds global market share. Their high-bandwidth memory chips form a key bottleneck for AI training hardware used by tech giants like Microsoft and Google.
Meanwhile, Bitcoin held firm close to $64,000 throughout the turbulence. Unlike the volatile chip stocks, crypto showed no reaction to the Kospi’s rollercoaster ride, signaling a quiet decoupling between emerging-market equities and digital assets for now.
This chip sector volatility is a fresh twist in a turbulent July when the Kospi endured multiple 10%+ drops triggering trading halts, all linked to doubts over AI demand projections baked into semiconductor prices. The question now is whether this volatility will persist or stabilise as investors reassess the AI hardware boom.
This material is informational and not financial advice.
