Global Chip Selloff Sends South Korea's Kospi on a Wild Ride

South Korea's stock market delivered another set of dramatic swings this week as a global selloff in artificial-intelligence and semiconductor shares rippled through Seoul. The benchmark Kospi tumbled 7.89% on Thursday to its lowest level in weeks, led by declines of about 9% in Samsung Electronics and nearly 13% in SK Hynix, before rebounding 5.76% the following session as bargain hunters piled back into the same heavyweights. The volatility followed a sharp overnight retreat in US chip stocks driven by growing investor unease over whether the enormous sums being spent on AI infrastructure can be sustained. Analysts note that Samsung and SK Hynix now account for roughly half of the Kospi's total weight, up from about a quarter a year ago, meaning a sharp move in either name drags the entire index with it. Domestic sentiment was further pressured by news that South Korea's annual inflation accelerated to 3.2% in June, the highest since December 2023. Even so, the market remains up strongly for the year, and record June export data underscored that the chip sector's underlying demand stays robust.