Kospi Falls Up to 7% as Samsung and SK Hynix Drop More Than 8% in Fifth Straight Chip Selloff

Since the Kospi hit its record high in June, South Korea's benchmark has lost roughly a third of its value. Tuesday's Asian session, already underway as of Oct. 13 local time, pushed it further.

The index fell as much as 7% as the global semiconductor selloff deepened. Samsung Electronics and SK Hynix each dropped more than 8% at the worst point, and both were headed for a fifth straight session of losses. The Kospi is now below its 200-day moving average.

What hit the chip stocks

The trigger was a report that China's CXMT Corp. has made progress on a new memory architecture that Samsung and SK Hynix are also developing. According to the report, CXMT plans to roll out a new server-memory product by the end of 2026 with higher storage density.

On Wall Street, Micron Technology fell 3.9% in the Monday session. The US-listed shares of SK Hynix dropped about 4%.

The second pressure point was a comment from Broadcom Inc.'s chief executive about the gambling-like qualities of AI stock investment. The remark gave the market its "casino" label and added to worries about stretched AI valuations.

The damage across Asia

The selloff did not stay in Seoul. Japan's Kioxia Holdings shed more than 12%. A gauge of Chinese technology stocks fell 3.6% before paring its decline.

In Australia, the S&P/ASX 200 dropped 38.8 points, or 0.4%, to 8744.4 by 12:04 p.m. Sydney time. The technology sector fell 2.6%. Codan lost 2.5%, Xero shed 2.4% and WiseTech Global dropped 3.8%.

Korea has the most exposure because its market leans so heavily on two companies. This year's big Korean rally has now sharply pared, and that dependence is the reason.

Earnings did not help

Samsung posted record earnings last week. The stock did not respond. Investors are looking past the quarter to what comes after it.

"Uncertainty over whether the upcycle can last into 2028 and beyond appears to be weighing on valuations and share prices" of Korean chipmakers, said Ha SeokKeun, chief investment officer at Eugene Asset Management.

Jung In Yun, chief executive officer at Fibonacci Asset Management Global, pointed to the same two worries: competition from CXMT and the sustainability of AI spending. "Samsung's strong earnings have been overshadowed by concerns about future competition from CXMT and the sustainability of AI spending," he said.

Foreign investors have been leaving. They have sold more than $6 billion worth of Kospi shares on a net basis in October.

The counterargument

Yun also offered a caution against reading too much into the CXMT news. "These concerns may weigh on sentiment, but CXMT still needs to translate technological progress into commercially competitive production at scale," he said.

That is a real distinction. A design that stores more data is not the same as a product shipping in volume at competitive cost. The report describes progress and a planned product, not a finished one in the market.

It also explains why the reaction looks larger than the news. The market is pricing a possible threat to Samsung and SK Hynix margins from China, in a sector where valuations had already run up on AI demand.

What to watch

The ASX session followed a mixed Wall Street day, with investors waiting on the start of US reporting season. Four major US banks are due to deliver third-quarter updates on Tuesday.

The nearer test for Korean memory stocks is CXMT's schedule. The company's server-memory product is due by the end of 2026, and its production capacity and pricing will show whether Samsung and SK Hynix face a competitor at scale or only a headline.