South Korean stocks crater as chipmaker selloff erases months of AI gains

South Korea’s benchmark KOSPI index collapsed 10.8% on July 28, closing at 6,023.66 in its steepest single-session plunge since early March. The culprits were the same two names that powered the index to record highs just weeks ago: Samsung Electronics and SK Hynix, which together account for more than half the index’s weighting. Samsung shares cratered between 13.4% and 14.4%, marking the company’s worst daily loss since October 2008. SK Hynix fared even worse, shedding 14.7%. The KOSPI peaked around 9,114.55 in June. What triggered the freefall The selloff traces back to July 27, when China’s ChangXin Memory Technologies made its debut on the Shanghai STAR Market. CXMT’s shares surged 466% from an IPO price of 8.66 yuan, catapulting its market capitalization to roughly $484 billion. South Korean investors responded by unwinding leveraged positions ahead of Q2 earnings reports from local chipmakers. Circuit breakers and trading halts kicked in multiple times during the session, the eighth time KOSPI circuit breakers have been activated in 2026 alone. The broader catalyst was a global semiconductor stock slump, driven by concerns over stretched valuations tied to AI hype, potential...