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KOSPI falls as South Korean chip stocks slide in global semiconductor selloff

KOSPI falls as South Korean chip stocks slide in global semiconductor selloff

After a July 28 chip-led rout triggered trading curbs and exposed steep retail losses, South Korea ordered regulators to review whether leveraged ETFs, derivatives and market structure amplified volatility.

Fact Check
All components of the claim are corroborated. Trading Economics confirms KOSPI fell >1% on July 27, 2026 with Samsung and SK Hynix declining amid US-led chip-sector weakness. Cryptorank/BeInCrypto confirms the ~$950 billion in Korean AI chip deals with stocks still falling on profit-taking. Reuters confirms CXMT's July 27 STAR Market debut and its framing as competition to Samsung/SK Hynix in DRAM. The narrative that stocks fell despite the deals, deepened by CXMT's debut and Chinese memory competition, is consistent across independent sources.
    Reference: 123
Summary

A global semiconductor selloff hit South Korea especially hard on July 28, as investors cut AI-linked chip exposure amid doubts over how quickly heavy data-center spending will generate returns and growing concern that Chinese companies are advancing in memory and chip equipment. The KOSPI fell 10.84% to 6023.66 after briefly breaking below 6000, while the Kosdaq dropped more than 7% and trading was temporarily halted on both markets. Samsung Electronics fell 13.39% and SK Hynix dropped 14.65%, with foreign investors selling a net roughly 5 trillion won on the main Kospi market. On July 29, Kim Yong-beom, President Lee Jae-myung’s chief policy secretary, said the Financial Services Commission and Financial Supervisory Service will review the recent volatility, including the role of leveraged ETFs, derivatives trading, investor composition and broader market structure, while saying leveraged ETFs may amplify swings but are not the only factor.

Terms & Concepts
  • leveraged ETFs: Exchange-traded funds that use borrowed exposure or derivatives to magnify the daily moves of an underlying index or asset.
  • sell-side sidecars: Temporary trading curbs that pause program sell orders when markets move sharply, aimed at calming volatility.
  • deep ultraviolet lithography: A chipmaking process using short-wavelength light; immersion DUV tools are important semiconductor equipment historically dominated by a small number of suppliers.