South Korea’s main stock index, KOSPI, plunged 10.84% on July 28, closing at 6,023.66 the lowest level since April. The sharp decline forced two trading halts after losses crossed the country’s 8% circuit breaker limit. This selloff erased around $1.7 trillion in market value from the index’s peak, signaling intense pressure on the country’s tech-heavy shares.
Massive Drops in Samsung and SK Hynix Drive Market Downturn
Samsung Electronics and SK Hynix, two of South Korea’s largest chipmakers, were hit hardest during the session. Samsung shares tumbled 13.4%, while SK Hynix plunged 14.7%, significantly dragging the KOSPI lower. The secondary Kosdaq index also declined 7.72%, reflecting a broad selloff in the tech sector. SK Hynix’s U.S.-listed shares mirrored the trend, falling nearly 12% over 24 hours to trade near $139.45, below its $149 initial price.
Investor Worries Mount Over AI Spending and Chinese Competition
Investors are growing cautious about the sustainability of the AI-driven chip demand rally. Despite recent gains fueled by AI hardware needs, concerns about high costs and the longevity of investment cycles have spooked the market. The selloff was echoed in U.S. chip stocks, where Nvidia dropped 5%, AMD lost 5.2%, and Micron fell 2.3%. Adding to the uncertainty, Chinese competition is intensifying. Chinese memory chipmaker CXMT surged 466% during its Shanghai trading debut but then fell 4%. Reports of China beginning mass production of advanced deep ultraviolet chipmaking equipment, key for printing circuit patterns on silicon wafers, have unsettled investors. This development suggests China could soon challenge global chipmakers and equipment suppliers.
This material is for informational purposes only and does not constitute financial advice.
