An overnight plunge in the Philadelphia Semiconductor Index and fears of delayed next-gen AI chip supply hit at once
The KOSPI, which surged 3.76% yesterday (the 5th) on foreign buying, reversed course today (the 6th), plunging 4.58% to close the week at 6,296.38. Korean markets have now been swinging between extremes on a near-daily basis for several weeks running. Today, the two semiconductor bellwethers took the brunt of the damage, while the KOSDAQ moved in the opposite direction, extending its gains to a fifth consecutive session, a stark divergence. Here’s a breakdown of today’s session and what drove it.
Losses Widened All Day Long
The KOSPI opened down 119.51 points (1.81%) at 6,478.75, down from the prior close of 6,598.26. Profit-taking following yesterday’s rally, combined with caution ahead of this week’s major US Big Tech earnings releases, weighed on the market from the opening bell. Losses only deepened from there, and the index ultimately closed down 301.88 points (4.58%) at 6,296.38. The won closed out the week at 1,423.8 per dollar, down 0.7 won from the prior session.
SK Hynix Plunges 10.37%, Samsung Electronics Falls 6.30%
The epicenter of today’s decline was clear. An overnight plunge in the Philadelphia Semiconductor Index, combined with concerns that next-generation AI chip supply schedules could slip, hit shares of Korea’s two largest companies by market cap hard. Samsung Electronics closed down 6.30% at 235,000 won, weighed down by concentrated foreign selling. SK Hynix fared even worse. Warnings about short-term overheating in high-bandwidth memory (HBM) and a wave of profit-taking hit simultaneously, sending the stock plunging 10.37% to close at 1,495,000 won. In a single day, foreign investors are estimated to have sold more than 3 trillion won worth of shares.
KOSPI Falls, KOSDAQ Rises for a 5th Straight Day — A Clear Divergence
What stands out is the KOSDAQ’s trajectory. Even as the KOSPI plunged, the KOSDAQ shrugged off the decline, buoyed by support from pharmaceutical, biotech, and secondary battery names, closing higher for a fifth consecutive session. On the flow side, foreign investors were net sellers of 248 billion won on the KOSDAQ, but institutions and individuals net bought 161.4 billion won and 85.8 billion won respectively, flipping the index from negative to positive. It’s a pattern that’s played out repeatedly this week: volatility that had been concentrated in semiconductors is spreading out, with capital rotating into other sectors instead.
Investor Takeaways and Expert Views
⚠️ Things Investors Should Watch
- Day-to-day reversals continue: Yesterday’s 3.76% surge, today’s 4.58% plunge. With this kind of extreme daily volatility having repeated for several weeks now, managing volatility itself matters more than fixating on short-term returns.
- The direction of foreign capital is the key variable ahead: Whether foreign investors, who sold more than 3 trillion won today alone, continue exiting or pivot back to bargain-hunting is seen as the key factor determining whether the KOSPI can reclaim the 6,300 level.
- Today reconfirmed the risk of chip-sector concentration: The structure where the moves of just two stocks, Samsung Electronics and SK Hynix, can shake the entire index remains firmly in place. It’s a clear illustration of why diversification matters.
- Watch KOSDAQ’s alternative-sector strength: As volatility spreads through the chip sector, flows are rotating into pharma, biotech, secondary batteries, and financials. Whether this capital rotation into alternative sectors continues is worth watching closely.
📌 What Experts Are Saying
- Market commentary (on flows): Forecast that whether the foreign capital outflow, which dumped more than 3 trillion won in a single session, continues, or reverses into fresh bargain-buying, will be the key to whether the KOSPI reclaims the 6,300 level.
- Market commentary (on sector rotation): Assessed that as volatility spreads through the semiconductor sector, a rotation-driven concentration centered on alternative sectors like pharma, biotech, secondary batteries, and financials could intensify, making a diversified investment strategy worthwhile.
Taken together, today’s decline is best understood as the result of an overnight correction in US semiconductor stocks and fears of delayed next-generation AI chip supply, concentrated squarely on Korea’s two chip bellwethers. Still, the fact that the KOSDAQ extended its gaining streak to a fifth day on the very same day suggests the risk may simply be rotating from one sector to another, rather than reflecting a broader market collapse. Next week’s US Big Tech earnings releases, along with the direction of foreign investor flows, are likely to be the next turning point in this extremely volatile stretch.
Sources
- Businesskorea — “[Market Close] KOSPI Plunges 4.58% to Close at 6,296.38… Won/Dollar Rate Ends the Week at 1,423.8, Down 0.7 Won from the Prior Session” (businesskorea.co.kr)
- Businesskorea — “[Opening Market] KOSPI Opens Slightly Lower, Trades Around 6,420 Level… Won/Dollar Rate Enters 1,410 Range Amid Won Strength” (businesskorea.co.kr)
- Businesskorea — “[Market Diagnosis] Who’s to Blame for the Samsung/Hynix Plunge?… The 800 Trillion Won Southwestern Semiconductor Cluster” (businesskorea.co.kr)