South Korea's Kospi Slumps on Selloff in Chip Stocks
By Kwanwoo Jun
South Korean stocks slumped Tuesday, dragged by a selloff in semiconductor shares that triggered a temporary trading halt to curb volatility.
Concerns about intensifying competition from Chinese chip makers, including ChangXin Memory Technologies, known as CXMT, weighed on South Korean chip stocks, tracking declines overnight by their U.S. peers.
"AI and technology stocks, including memory chip makers, are trading lower due to advancements in DRAM technology by China's CXMT," said LS Securities analyst Kim Yun-jeong in a note.
Over the weekend, CXMT unveiled a new chip structure with around 30% reduced cell area, and plans to debut a product with the new structure by the end of 2026.
The benchmark Kospi fell more than 7% on Tuesday morning, falling below the 6000 mark for the first time since late July. The index was last down 7.1% at 5934.47.
The Korea Exchange briefly suspended trading to curb excessive volatility, marking the first such halt in two months.
Losses were led by Samsung Electronics and SK Hynix, the world's two biggest memory-chip makers, whose combined market capitalization accounts for nearly half of the Kospi's total market value. Samsung and SK Hynix slid nearly 9% and 10%, respectively, in early trading.
The chip-driven retreat in the Kospi came amid a broader global selloff in chip stocks, with the Philadelphia Semiconductor Index falling 2.7% overnight.
Meanwhile, market jitters over AI continued to linger. Broadcom Chief Executive Hock Tan compared many AI investors to casino gamblers at the DBS Asia Future Forward Conference in Singapore on Monday.
"A lot of investors have no clue what they are investing in," Tan said. 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 investors in Seoul trading on Tuesday. Offshore investors remained heavy net sellers, outweighing buying by local investors.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
October 12, 2026 23:52 ET (03:52 GMT)
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