KOSPI Plunges as Chip Shares Drop on AI Concerns in Seoul

South Korea's benchmark KOSPI index fell more than 7% in Seoul on Tuesday, Oct. 13, 2026, as investors sold major semiconductor stocks over concerns about the artificial intelligence boom, while broader Asian markets also declined following mixed U.S. stock results.

According to finance.yahoo.com, the KOSPI dropped 7.4% to 5,914.35, reaching its lowest level since late July. The index had surpassed 9,000 in June during a rally driven by enthusiasm over AI-related demand.

Samsung Electronics declined 7.7% and SK Hynix fell 8.8% as investors reacted to reports that China's memory chipmaker CXMT could become a stronger competitor to major global suppliers. Finance.yahoo.com reported that concerns also affected other technology shares, including Nvidia, AMD, Micron Technology and Broadcom in U.S. trading.

Asian markets were broadly weaker, with Japan's Nikkei 225 down 2.5%, Hong Kong's Hang Seng down 1%, and Taiwan's Taiex down 1.9%, according to finance.yahoo.com. Oil prices also fell, with Brent crude declining 1.4% to $105.20 a barrel and U.S. crude dropping 1.5% to $92.34.

"The market is more concerned over recent developments in the Middle East, with Houthi attacks on Saudi Arabia and the lingering risks to oil flows from the Persian Gulf," wrote Warren Patterson and Ewa Manthey, ING commodities strategists.

Currency movements have added pressure to South Korean equities. According to a report from iM Securities cited by finance.biggo.com, economist Park Sang-hyun said the won's 13.8% appreciation in the second half of the year encouraged foreign investors to sell South Korean stocks during the market correction.

"In a stock market correction phase, currency gains from the won's strength are strengthening foreign investors' inclination to sell," said Park Sang-hyun, economist at iM Securities.

The iM Securities analysis said the KOSPI had underperformed major markets since July, while foreign net selling increased again from September. Park also noted that profit-taking after a strong rally and weaker market supply-demand conditions contributed to the decline.

Park said the KOSPI's recovery would require improvement in semiconductor conditions and more stability in currency markets. He linked the recent weakness to the importance of chip companies in the earlier market rally.

"The global semiconductor cycle needs to regain momentum for the KOSPI's divergence to narrow," said Park Sang-hyun, economist at iM Securities.

Park added that easing concerns over oil prices and U.S. Treasury yields would also be important factors as investors assess global risks.

"If won volatility subsides and external uncertainties ease, foreign investors' aggressive net selling of South Korean stocks should lose steam," said Park Sang-hyun, economist at iM Securities.

The economist said market conditions could take time to improve as investors monitor exchange rate volatility and global semiconductor industry indicators.

"This is a phase that will require more time," said Park Sang-hyun, economist at iM Securities.

Investors are also watching upcoming earnings reports from major companies, including Citigroup, JPMorgan Chase and Wells Fargo, according to finance.yahoo.com.