South Korea’s KOSPI index plunged nearly 50% in 40 days, with Samsung and SK Hynix — which account for half of the index’s weighting — acting as a major driver of the decline.

South Korea’s stock market has recently faced intense selling pressure, with AI chip trading shifting from a crowded high-level position to concentrated liquidation. The KOSPI index hit an intraday all-time high of 9,385.59 points on June 19, before plummeting in less than a month and a half. Calculated at the current level around 5,689 points, the index has pulled back roughly 39% from its peak; measured against yesterday’s intraday low, the maximum decline is nearly 44%. In terms of market capitalization, the KOSPI’s total market cap has shrunk sharply from its mid-June high, with market estimates putting the evaporated value approaching $2 trillion (roughly 1.55 times Bitcoin’s total market cap). The core pressure driving this round of declines is concentrated in semiconductor heavyweight stocks. The KOSPI is a market-cap weighted index, with Samsung Electronics and SK Hynix exerting enormous influence on the benchmark. Recent calculations show Samsung Electronics accounts for nearly 30% of the KOSPI’s market cap, while SK Hynix makes up over 20%, bringing the two firms’ combined weight to more than 50%. In other words, South Korea’s main board index is highly tied to AI memory, High Bandwidth Memory (HBM), and the semiconductor cycle in this market move. Previously, SK Hynix’s stock surged on the back of HBM demand, memory price hikes, and AI server orders, while Samsung Electronics also benefited from market bets on an AI memory recovery. However, as global tech stock volatility intensified, investors began reassessing risks including returns on AI capital expenditure, competition from Chinese memory players, stretched valuations, and the risk of leveraged funds exiting, triggering a sharp reversal in South Korea’s semiconductor stock chain.