South Korea’s KOSPI plunged more than 5% on Friday, triggering emergency trading curbs as Samsung Electronics and SK Hynix tumbled in a fresh rout of artificial intelligence-linked shares.
The benchmark fell 5.13% to 5,633.34 by 10:25 am in Seoul, with Samsung down around 5% and SK Hynix nearly 8%. The Korea Exchange temporarily restricted programme sell orders after futures collapsed.
The selling followed another technology retreat on Wall Street and heavy selling by foreign investors.
Record profits from both memory-chip giants have done little to persuade investors that the AI spending boom can sustain today’s earnings.
The latest pressure came from the United States, where Alphabet shares lost 12.6% on Thursday after heavy AI investment pushed its free cash flow into negative territory. The Nasdaq Composite fell 1.38%, while Intel and Amazon weakened further after reporting results.
The reaction matters particularly for South Korea. Samsung and SK Hynix supply memory used in data centres, and their earnings depend increasingly on technology companies continuing to expand AI capacity.
Samsung reported third-quarter operating profit of 107.4 trillion won, while SK Hynix earned 83.33 trillion won. Yet those records have offered little protection against doubts about how long their customers can keep spending.
Investors are not necessarily predicting a collapse in chip orders. They are questioning whether data-centre investments will deliver enough profit to justify another round of enormous spending.
Pepperstone analyst Chris Weston captured that shift, telling Reuters that markets were questioning whether shareholders would earn “an adequate return on the enormous capital being deployed.”
The distinction helps explain why exceptional current earnings can coexist with sharply falling semiconductor share prices.
The KOSPI opened 2.99% lower and its losses accelerated as overseas investors and local institutions sold shares together.
At 10:04:55 am, the Korea Exchange activated a sell-side sidecar after KOSPI 200 futures fell 5.12%. The measure paused programme sell orders for five minutes, rather than shutting the entire stock market. It was the first such intervention in 11 trading sessions.
By 10:25 am, foreign investors had sold a net 553.7 billion won of shares, while institutions unloaded another 240.9 billion won. Retail investors bought 709.3 billion won, but could not arrest the decline.
Seo Sang-young, a managing director at Mirae Asset Securities, told The Herald Business that foreign investors’ futures and cash-market positions were critical to the direction of Korean stocks.
He said recent chip-share volatility reflected shifts in capital flows and sentiment as much as changes in earnings.
That helps explain the speed of Friday’s retreat. Selling by major investors can drive the index lower even when smaller buyers regard valuations as attractive.
The KOSPI’s latest fall followed a 9.93% two-session rally through Wednesday, showing how quickly sentiment has swung.
Samsung faced additional pressure after its shareholder-return announcement offered few immediate details about further buybacks or cancellations. IBK Investment & Securities cut its price target to 350,000 won from 460,000 won, citing disappointment over the policy.
There is a more optimistic argument. Hanwha Investment & Securities analyst Ha Jang-kwon said in an October 28 assessment reported by Chosunbiz that Korean share prices had fallen too far relative to earnings already generated.
Those hopes depend on whether corporate guidance can restore confidence in future chip margins.
