Media365
South Korean stocks suffered another day of heavy losses on Wednesday, with the benchmark Kospi plunging more than 11 per cent and triggering a market-wide trading halt for the second straight session as disappointing earnings from memory chip giant SK Hynix intensified a selloff in artificial intelligence-linked technology stocks.
The sharp decline extended one of the worst routs in the country’s stock market history, with investors rushing to dump semiconductor shares amid growing concerns that expectations surrounding the AI boom had become overstretched.
The Kospi Index fell as much as 11 per cent during the session after earlier dropping nearly 10 per cent, prompting authorities to activate a circuit breaker that temporarily halted programme trading. The benchmark has now slumped more than 30 per cent this month and is on track for its worst monthly performance on record after posting one of the world’s strongest rallies earlier this year.
The latest selloff was led by SK Hynix and Samsung Electronics, the country’s two biggest chipmakers and the main drivers of South Korea’s stock market gains in 2026.
Shares of SK Hynix tumbled after the company reported earnings that failed to meet investors’ lofty expectations, despite continued strong demand for high-bandwidth memory (HBM) chips used in artificial intelligence servers. Investors had been hoping for another blockbuster quarter following months of AI-driven optimism, but the results triggered fresh concerns that earnings growth may be nearing its peak.
Samsung Electronics also extended losses as investors broadly reduced exposure to semiconductor stocks, fearing the AI investment cycle could slow after an explosive rally over the past year.
The two companies account for a significant share of the Kospi’s market capitalisation, making the broader index especially vulnerable to swings in chip stocks.
Retail investors added to the selling pressure by cutting positions in technology shares, while institutional investors also pared exposure amid mounting uncertainty over AI-related valuations.
The latest slump follows weeks of weakness in global technology stocks, with investors increasingly questioning whether the pace of spending on AI infrastructure can be sustained. Elevated valuations across semiconductor companies have left markets vulnerable to even modest earnings disappointments.
South Korea had emerged as one of the world’s best-performing equity markets earlier this year, driven almost entirely by optimism surrounding artificial intelligence and surging demand for advanced memory chips. SK Hynix and Samsung were among the biggest beneficiaries as global technology companies ramped up investment in AI data centres.
However, sentiment has reversed sharply in recent weeks as investors reassessed growth expectations and booked profits after the sector’s remarkable rally.
The record monthly decline highlights the extent to which South Korea’s stock market has become dependent on its semiconductor industry, with weakness in just a handful of technology companies dragging down the broader market.
