TL;DR
The Korean stock market has just experienced its steepest decline of the year.
After the open on Monday, the KOSPI fell nearly 9% intraday, triggering a circuit breaker. Samsung Electronics and SK Hynix both plunged sharply, prompting market discussions on whether the AI bull market has reached a turning point.
But even as the market panicked and sold off, something else was happening in Seoul.
Jensen Huang kicked off his trip to South Korea over the weekend, meeting with SK Group Chairman Choi Tae-won and announcing a new multi-year partnership between NVIDIA and SK Hynix to co-develop next-generation memory products for AI data centers. He also held intensive discussions with leading Korean tech companies such as Samsung Electronics, LG, and NAVER, reiterating that AI infrastructure development is still in its early stages.
As a result, a strikingly contrasting scene has emerged in the market.
On one hand, South Korea’s leading AI companies are facing concentrated selling pressure; on the other, the core customers of the AI industry chain are continuing to strengthen their ties with South Korea’s supply chain.
If AI demand truly begins to collapse, Jensen Huang wouldn't need to fly specifically to Seoul to strengthen cooperation.
This is also why new debates have begun to emerge in the market today.
Is the Korean market truly anticipating the peak of the AI cycle, or is it undergoing a typical high-level deleveraging?
South Korea has become one of the most AI-sensitive markets in the world.
Although this decline occurred in Korea, the trigger did not originate from Korea.
Last Friday, the U.S. semiconductor sector experienced significant selling pressure. The Philadelphia Semiconductor Index recorded one of its largest single-day declines in recent years, with AI infrastructure-related companies such as Broadcom and Micron also pulling back. Subsequently, the market began reassessing its exposure to high-valued technology stocks.
South Korea became the most directly affected market.
Over the past year, the primary drivers of South Korea's stock market rise have not been domestic economic factors, but rather AI data center construction, growing demand for HBM, and the expansion of NVIDIA's supply chain.
Samsung Electronics and SK Hynix together hold a very high weight in the South Korean market. When global capital seeks to bet on AI infrastructure, South Korea is one of the most convenient entry points; and when capital begins to reduce its AI positions, South Korea naturally becomes one of the easiest markets to sell off.
Therefore, the decline in the Korean market was much greater than that of the U.S. market itself.
In a sense, South Korea is no longer just a country index but more like a large-cap AI memory ETF.
Huang Renxun’s visit to South Korea stands in stark contrast to market panic.
If market panic stems from valuation, then the biggest positive news over the weekend comes from the industry chain itself.
Jensen Huang’s core objective during this visit to Korea was clear: to further strengthen NVIDIA’s collaboration with Korea’s AI supply chain. Of particular interest was the announcement of a new multi-year partnership between NVIDIA and SK Hynix. Over the past two years, HBM has become one of the most critical components in AI servers, and SK Hynix has been one of the primary beneficiaries.
This is also why the market is closely following this partnership.
Over the past few months, as AI infrastructure scaling has expanded, the market has begun to worry whether demand for HBM is nearing its peak. However, Jensen Huang’s visit to Korea at this time actually signals the opposite. If NVIDIA believed AI data center construction was nearing completion, it would have no reason to continue strengthening long-term partnerships with suppliers at this juncture.
From an industry chain perspective, there is no evidence that AI demand has suddenly disappeared.
The most interesting aspect over the past two days has been here. Capital markets are expressing concerns about AI sector valuations through stock prices, while the core companies in the industry continue discussing expansion and collaboration plans for the coming years. A clear disconnect remains between the prices the market is assigning and the signals being sent by the industry.
The AI bull market is entering the profit pool reevaluation phase.
This is also the current point of greatest divergence.
Over the past year, the market has priced in a very simple logic: growing demand for AI. As a result, NVIDIA, Micron, SK Hynix, and Samsung Electronics all rose—and nearly any company tied to AI saw its valuation increase.
However, as the sector's gains continue to expand, the market enters its second phase.
Investors are no longer satisfied with the narrative that "AI will grow"; instead, they are now asking a different question: Who will benefit from the profits generated by AI growth? Over the past few months—from Rubin’s cabinet memory adjustments, to market reactions following Broadcom’s earnings report, to this week’s crash in the Korean market—the underlying theme has been the same: the market is beginning to dissect the AI profit pool.
SK Hynix benefits from HBM, Samsung Electronics is strategically positioned in HBM, DRAM, and advanced packaging, while Micron gains more from overall memory upgrades in AI servers. Although all are part of the AI supply chain, their sources of profit and pricing power differ.
In the past, the market was willing to extend valuation multiples to the entire sector, but now capital is beginning to scrutinize each company individually to verify whether these profits can truly be realized.
This is why a supply chain update, earnings guidance, or even an adjustment in capital expenditures can trigger significant volatility across the entire sector. The focus of market trading has shifted: investors are now more concerned about who will ultimately report the growth, rather than whether AI continues to expand.
What determines the direction of the Korean stock market is not Korea itself.
Over the coming weeks, the direction of the Korean market will still be determined by NVIDIA orders, HBM supply and demand, and cloud providers' capital expenditures.
If this data begins to weaken, this crash could be the beginning of a larger valuation adjustment.
However, if data center construction, GPU shipments, and HBM procurement continue to grow at a high pace, Monday’s circuit breaker更像是一个拥挤交易的集中出清。
At least for now, the prices offered by the market do not fully align with the signals coming from the industry chain.
On one side, South Korea’s leading AI company is facing its most intense selling pressure in recent years; on the other, Jensen Huang is in Seoul discussing the next generation of AI infrastructure with supply chain partners.
Whose judgment is closer to reality may soon be answered.