KOSPI Index Falls Nearly 44% in 40 Days Amid AI Chip Sell-Off

Huo Xing Finance reports that on July 30, South Korea’s stock market recently experienced sharp selling pressure, with AI chip trading shifting from overcrowded highs to concentrated liquidation. The KOSPI index reached a historic intraday high of 9,385.59 on June 19, then rapidly declined within less than a month and a half. Based on the current level near 5,689 points, the index has retraced approximately 39% from its peak; if measured from yesterday’s intraday low, the maximum decline has approached 44%. On a market capitalization basis, the total market cap of the KOSPI has significantly contracted since its mid-June peak, with market estimates suggesting the loss is approaching $2 trillion (roughly equivalent to 1.55 times Bitcoin’s total market cap). The core pressure in this downturn is concentrated in semiconductor-heavy stocks. As a market-cap-weighted index, the KOSPI is heavily influenced by Samsung Electronics and SK Hynix. Recent calculations show that Samsung Electronics accounts for nearly 30% of the KOSPI’s market cap, while SK Hynix exceeds 20%, combining for over 50% total weight. In other words, South Korea’s main board index is highly correlated with AI memory, HBM, and semiconductor cycles. Previously, SK Hynix saw its stock surge driven by strong HBM demand, rising memory prices, and AI server orders, while Samsung Electronics also benefited from market optimism around an AI memory recovery. However, as global tech stocks become more volatile, investors are reassessing the return on AI capital expenditures, competition from Chinese memory manufacturers, overvalued valuations, and risks associated with leveraged capital withdrawal—leading to a rapid reversal in South Korea’s semiconductor sector.