South Korean stocks were hit by a second trading suspension this week as chipmakers plunged, highlighting the market’s sensitivity to swings in global artificial-intelligence sentiment.   

The benchmark Kospi extended losses after the Korea Exchange’s 20-minute trading halt, falling as much as 9%. Samsung Electronics Co. and SK Hynix Inc. each fell more than 10 per cent at one point. Foreign investors sold 5 trillion won ($3.2 billion) worth of Kospi shares. 

The drop marks a rapid reversal from Thursday’s jump, when Micron Technology Inc.’s bullish forecast and a US-listing planned by SK Hynix boosted optimism over the sustainability of the AI trade. Sentiment soured as traders parsed developments including Apple Inc.’s product price hike due to a shortage of memory chips, massive investment plans by local chipmakers, and concerns that OpenAI may delay its initial public offering.

The Korean market has been gripped by extreme volatility this year, fuelled by surging retail activity reliant on margin trading and a wave of leveraged exchange-traded funds tracking chipmakers. Together, these forces have made the $4.9 trillion market prone to sharp swings. Among the eleven circuit breakers activated for Kospi trading since 2000, five occurred this year.

Volatile market

The moves are likely due to “rumours of IPO delays in the US, alongside Apple’s price hikes,” said Homin Lee, a strategist at Lombard Odier in Singapore. These developments add fuel to the ongoing debate over the limits of the memory bottleneck, he said, adding that volatility is likely to persist, driven by the various levered trades. 

Asia’s tech stocks sold off broadly on Friday, with the MSCI Asia Pacific Infotech gauge falling more than 6%. Apple’s price hikes offered one of the clearest signs yet that the industry’s pricing power may come at the expense of future demand, prompting a broad recalibration across AI-linked semiconductor stocks. 

Separately, Samsung and SK Hynix are preparing to announce hundreds of billions of dollars worth in new investments on Monday, according to local media reports. Samsung Group is set to unveil a 1,000 trillion won spending package over the next decade, Maeil Business Newspaper, in what would be the largest such plans in the country’s history.  

The Kospi has been whipsawed this year by the two chip giants that together account for nearly 60% of the gauge’s weighting. Volatility has been such that some analysts are likening the market’s intraday swings to the meme-stock frenzy. Leveraged ETFs, hugely popular among the retail crowd, have been amplifying volatility due to the daily rebalancing mechanism. 

The Kospi 200 Volatility Index, a measure of option prices on the Kospi 200 index, hit a fresh peak in the past two days. It’s about five times higher than the Cboe Volatility Index of the US.

“Volatility with no clear direction can be painful for trading,” said Daniel Tan, a portfolio manager at Grasshopper Asset Management. “We are seeing where this consolidation happens, before possibly adding to tech names.”

The surge in swings has boosted demand for hedges. The number of options outstanding on Samsung has jumped to a peak as large block trades hit the market after the close of trading hours this week — including one that reached almost 500,000 lots, worth more than 1.5 trillion won in notional. The open interest for SK Hynix is also near a record, while that on the iShares MSCI South Korea ETF traded in the US hit an all-time high before the monthly expiration last week.

“The memory trade still has legs, but the tailwind is selective, while the headwind is much broader,” said Charu Chanana, chief investment strategist at Saxo Markets. “The risk is that a stronger memory cycle today starts to slow the broader AI trade tomorrow. And the market is starting to price that risk.”

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Published on June 26, 2026