KOSPI Falls 8% As July Loss Reaches 35% In Deepening Chip Rout

South Korea’s KOSPI fell 8% on Wednesday, extending its July decline to roughly 35% as another wave of selling hit the country’s largest semiconductor stocks.

The benchmark dropped to 5,547.77 by midday in Seoul, its lowest level since April. The Korea Exchange activated a market-wide circuit breaker at 12:33 p.m. after an earlier sell-side sidecar suspended programme trading for five minutes.

The circuit breaker requires the index to remain down at least 8% for one minute and halts trading for 20 minutes. Wednesday’s intervention followed a 10.84% KOSPI collapse in the previous session, when the index closed at 6,023.66 after Samsung Electronics and SK Hynix each lost more than 14%.

The two-session rout has pushed the KOSPI toward its largest monthly decline on record, surpassing the losses recorded during the 1997 Asian financial crisis. Tuesday alone brought about 5 trillion won of net selling from foreign investors.

SK Hynix Drops Despite Record Profit

SK Hynix fell 12.6% after reporting record second-quarter results, while Samsung Electronics dropped 8%. The two chipmakers account for more than half of the KOSPI’s weighting, leaving the wider market highly exposed to their price swings.

SK Hynix’s operating profit rose 557.2% from a year earlier to 60.54 trillion won, with sales climbing 256.8% to 79.31 trillion won. Net profit reached 93.92 trillion won, but the record numbers failed to reverse concerns over elevated AI valuations, spending commitments and the durability of demand for high-bandwidth memory.

The decline added to a series of violent reversals since the company’s U.S. listing. SK Hynix had already recorded its largest one-day fall in nearly two decades earlier in July as investors unwound positions accumulated during its AI-driven rally.

Global Chip Selloff Spreads Across Asia

The pressure extended beyond Seoul. Taiwan’s Taiex fell 3.6%, Japan’s Nikkei 225 declined and memory-chip producer Kioxia continued its retreat as investors reduced exposure to companies tied to AI infrastructure spending.

Competition from China has added another source of selling. ChangXin Memory Technologies’ market debut and reports of progress in domestically produced lithography equipment have raised expectations that Chinese manufacturers could capture a larger share of the memory-chip market.

U.S. chip stocks also weakened before earnings from major technology companies and the Federal Reserve’s July policy decision. Samsung is scheduled to publish its full second-quarter results and hold its earnings call at 10:00 a.m. Korea Standard Time on July 30.

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