South Korea’s equity markets experienced sharp declines, prompting a temporary halt to trading for the second time this week. The Kospi index dropped as much as 9% following a 20-minute suspension by the Korea Exchange, with significant losses seen among key chip manufacturers.
Shares of Samsung Electronics and SK Hynix both saw their values sink by over 10% during intraday trading. The pronounced selloff in the technology sector reflected heightened market sensitivity to changes in global demand for artificial intelligence-related stocks.
The volatility comes amid a backdrop of robust trading from individual investors using margin accounts, as well as increased activity in leveraged exchange-traded funds tied to semiconductor companies. This results in a sharp drop when force-selling triggers.
The movement on Friday contrasted with the previous session that saw technology stocks leading gains in the market, driven by Micron Technology’s better-than-expected quarterly performance and guidance, as well as SK Hynix’s announcement of a planned U.S. stock market listing.
Micron’s positive results reinforced investor expectations of continued tightness in memory chip supply, fueled by artificial intelligence demand, further boosting sentiment in the sector.
SK Hynix disclosed plans on Wednesday to pursue a U.S. listing aimed at raising up to $29.4 billion, a move anticipated by investors to help narrow the valuation difference with its American counterpart, Micron. The announcement came as Micron revealed that it had secured $22 billion in customer commitments for memory chips, projecting quarterly profit and revenue above market forecasts. This strong guidance sent Micron shares up 15% in after-hours trading.
The robust performance of Micron and the planned U.S. IPO by SK Hynix have heightened expectations for sustained high demand for memory chips related to AI infrastructure. Meanwhile, some analysts see the possibility of Samsung Electronics following SK Hynix in seeking a U.S. listing through American Depositary Receipts (ADRs), which could help close the valuation gap with Micron and act as a catalyst for Korean chip stock prices.
JPMorgan highlighted South Korea as its preferred equity market in the region and raised its year-end target for the Kospi to 12,500 points, projecting that continued momentum in AI and related sectors could further boost the performance of large-cap tech names and, by extension, the broader market.
The bank placed a potential bull scenario of the index reaching 15,000 by the end of 2026. As the best performing global index so far in 2026, the Kospi has doubled on the back of strong showings in the two prominent memory chipmakers.
The investment bank identified corporate earnings growth driven by AI data center investment as a major macroeconomic boost for Korea. It also projected that benefits will extend into industrials, financials, and the household and government sectors as ongoing governance reforms provide further support.
However, JPMorgan flagged that continued foreign outflows, which totaled a record $95 billion in 2026, and market volatility are likely headwinds. The firm noted that retail investors still have room to increase holdings, which could help sustain further gains.
