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KOSPI Nears Bear Market After ~20% Drop as AI Demand Doubts Hit Chip Stocks

July 8, 2026 at 01:39 EDT

Infra & Chips
Finance

South Korea's benchmark KOSPI index fell about 20% from its peak on July 8, 2026, approaching technical bear-market territory. The move came as investors reassessed the durability of artificial intelligence (AI) demand, accelerating outflows from chip stocks led by Samsung and SK Hynix.

AI Jitters · KOSPI Selloff

Korea's Chip Rally Cracks: KOSPI Tumbles ~8% as AI Doubts Hit Samsung and SK Hynix

Memory giants that drove the world's best-performing index were heavily sold, wiping out roughly $29 billion in value and pushing the benchmark toward a technical bear market — even as chip exports stay robust.

−8%

KOSPI benchmark, around July 2

−15%

SK Hynix single-day drop

−9.1%

Samsung Electronics drop

~$29B

Market value lost, two firms combined

A rally with a long way to fall

The KOSPI had climbed over 95% in 2026 — the sharper the run-up, the harder the reversal.

−8%

Recent
selloff

+95%

2026
gain to date

Why one wobble shakes the whole market

~50%

of KOSPI market cap sits in just Samsung + SK Hynix

Extreme concentration in two AI-memory names — plus fast-growing 2x/3x leveraged ETFs — makes the index prone to violent moves in both directions.

A circuit breaker was triggered on June 23 after a fall of more than 10%; program trading was temporarily halted during the July slide.

Bull case

AI-memory demand is structural: both firms warn HBM-driven shortages could run through 2027 and beyond, with customers reserving supply years ahead. Exports remain strong and prices may have simply overshot fundamentals.

Bear case

An analyst note flagged signs some companies are curbing AI spending. Heavy concentration and leveraged products amplify overreaction, and traders reported steep losses as the market whipsawed.

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