South Korea’s benchmark stock index collapsed 10.84% on Tuesday as a global retreat from semiconductor shares collided with the Kospi’s dependence on Samsung Electronics and SK hynix.
The Korea Composite Stock Price Index fell 732.09 points to close at 6,023.66 on July 28, marking its worst session since a record decline in March. The index dropped as much as 11.3% during trading and fell below 6,000 for the first time since April 14 before recovering part of the loss.
The Korea Exchange activated a marketwide circuit breaker after the index remained more than 8% below its previous close. Trading was suspended for 20 minutes in the eighth circuit-breaker activation of 2026 and the 14th since the mechanism was introduced.
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Tuesday’s loss was the Kospi’s fourth-largest percentage decline. The index fell a record 12.06% on March 4, 2026, surpassing the 12.02% decline recorded after the September 11 attacks in 2001. It also lost 11.63% during the dot-com collapse on April 17, 2000.
Samsung Electronics fell 14.4%, its largest daily decline since October 2008. SK hynix dropped 14.7% after its American depositary receipts fell below their US offering price.
The companies account for more than half of the Kospi’s weighting, according to Reuters. Their combined influence means that selling pressure in two semiconductor stocks can overwhelm gains or smaller declines across the rest of the exchange.
Only 36 of the 917 shares traded on the main market advanced during Tuesday’s session. A total of 878 declined.
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Foreign investors sold a net ₩5 trillion in shares, equivalent to approximately $3.42 billion at the exchange rate cited by Reuters. Retail investors bought about ₩4 trillion as they absorbed part of the institutional and foreign selling.
South Korea fell considerably more than other major Asian markets. Japan’s Nikkei 225 declined 4.3%, Taiwan’s Taiex lost 4.7%, and China’s Shanghai Composite fell 1.4%.
The decline followed a 2.2% drop in the Philadelphia Semiconductor Index and an approximately 5% fall in Nvidia during Monday’s US session.
Investors have been reassessing whether the revenues produced by artificial intelligence services can justify the borrowing, data-center construction, and semiconductor spending required by the industry’s expansion plans.
That reassessment is particularly important for South Korea because Samsung and SK hynix supply memory products used in AI servers and data centers. SK hynix is also a major supplier of high-bandwidth memory used alongside Nvidia processors.
Competitive pressure increased after Chinese memory-chip manufacturer ChangXin Memory Technologies surged 466% during its Shanghai market debut. The listing gave the company additional capital to expand capacity and develop products that could compete with Korean memory suppliers.
Reuters also reported that investors were reacting to separate media reports that a Chinese state-backed company had begun producing domestic immersion deep-ultraviolet lithography equipment. Reuters did not independently verify the underlying report, but the claim added to concerns that China could reduce its reliance on foreign semiconductor technology.
The Kospi has now declined 29% during July, exceeding its previous record monthly fall of 27% during the Asian financial crisis in October 1997.
The index is also 34% below its June 22 record closing level of 9,114.55. Despite the reversal, it remains 43% higher since the start of 2026, reflecting the scale of the AI-driven rally that preceded the decline.
The Kospi had already entered a bear market earlier in July after falling more than 20% from its June peak. Reuters previously attributed that reversal to volatility in chipmakers, concerns about AI valuations, and the growing use of risky leveraged investment products.
