South Korea’s KOSPI stock index plunged 10.84% on July 28, 2026, closing at 6,023.66 as investors dumped semiconductor stocks amid intensifying competition from China’s chipmakers. The sharp decline, confirmed by Bloomberg, Reuters, and Yahoo Finance, marks the steepest single-day fall since early March and reflects deepening investor anxiety over the sustainability of valuations in a sector that had soared on artificial intelligence enthusiasm.
Memory chip giants SK Hynix and Samsung Electronics led the rout, dropping 14.7% and 13.4% respectively, according to Reuters and Barron’s. The two companies account for more than half of the KOSPI’s weighting, amplifying the impact of the sector-wide selloff on the broader market, as noted by Reuters.
The selloff reflects investor fears over China’s progress in advanced semiconductor manufacturing. Nikkei Asia and Bloomberg reported that signs of progress in China’s chipmaking capabilities, coupled with new trade restrictions taking effect in 120 days, triggered the selling wave across Asian semiconductor stocks.
This collapse comes after a spectacular rise that made South Korea the world’s best-performing stock market in 2026. The KOSPI had surged 122% year-to-date, peaking at 9,385.59 on June 19–22, according to multiple sources including Reuters and Odaily. SK Hynix had just completed a record-breaking $26.5 billion U.S. initial public offering on July 10, raising capital to expand production amid the AI boom.
The July 28 decline deepens a broader market deterioration. The KOSPI has now fallen 34% from its June peak and has declined 29% so far in July—exceeding its record monthly fall of 27% in October 1997, according to Reuters. The index entered bear market territory on July 8, falling more than 20% from its June high, after investors began questioning whether chipmakers’ valuations could be sustained amid concerns over AI spending sustainability.
Trading halts became a common feature of the decline. Ajupress reported that South Korea’s stock exchange triggered 21 trading sidecars (circuit breakers) in July, including 12 on the KOSPI and nine on the tech-heavy KOSDAQ, as volatility spiked.
The concentration of the KOSPI in two stocks amplified the damage. By June, Samsung and SK Hynix accounted for nearly 60% of the index’s market value, up from roughly 40% just 18 months earlier, according to data cited by CNBC and Instagram analysis. When both names collapsed simultaneously, the entire index moved sharply lower.
The semiconductor selloff reflects a global reassessment of chip-sector valuations. SK Hynix shares have fallen more than 35% from their June all-time high, and Samsung has faced similar pressure. Investors are now weighing whether the artificial intelligence boom can sustain the elevated prices chipmakers command, particularly as competitors in China advance their own manufacturing capabilities.
Sources
- Reuters — KOSPI decline data, SK Hynix and Samsung percentage drops, chipmaker weighting, monthly decline comparison to October 1997, China competition trigger.
- Yahoo Finance — KOSPI closing price and percentage decline on July 28, 2026.
- Bloomberg — China chipmaking progress and new restrictions, semiconductor selloff context.
- Barron’s — SK Hynix and Samsung percentage declines on July 28.
- Nikkei Asia — China chip competition fears as trigger for KOSPI decline.
- Al Jazeera — SK Hynix $26.5 billion U.S. IPO on July 10, 2026.
- Odaily — KOSPI peak of 9,385 points on June 19, 2026, and year-to-date gain of 122%.
- CNBC — Samsung and SK Hynix weighting in KOSPI (Emmer Capital data), bear market entry context.
- Ajupress — Trading sidecars triggered in July (21 total, 12 on KOSPI, 9 on KOSDAQ).
- Strait Times — SK Hynix decline from June all-time high.
