South Korea’s KOSPI stock index tumbled 10.84% on July 28, 2026, marking its worst session in about five months as chipmakers plunged on growing doubts about artificial intelligence spending. The benchmark index lost 732.09 points to close at 6,023.66, according to Reuters, triggering a 20-minute trading halt as losses accelerated past the circuit-breaker threshold.
Memory chipmakers bore the brunt of the selloff. SK Hynix fell 14.65% and Samsung Electronics dropped more than 13%, according to CNBC, as investors reassessed the returns on massive AI infrastructure investments. The Guardian reported that both firms faced renewed fears over AI spending and Chinese competition.
The selloff reflected a broader shift in investor sentiment. Analysts cited a combination of concerns over AI infrastructure financing risks, China’s technological advances, and questions about whether revenues could justify the valuations moving higher, according to Yahoo Finance and the Strait Times. The Wall Street Journal reported that Asia stocks fell Tuesday, “led by South Korean markets, amid growing concerns over spending linked to the artificial-intelligence boom.”
The KOSPI’s decline is the latest chapter in a volatile year for the index. The benchmark had surged roughly 90% earlier in 2026 on the strength of the AI memory chip boom, making it the world’s best-performing stock market. However, it has since fallen 25.9% from its June 22 record close, according to Investors.com.
The market’s rapid reversal echoes a pattern established earlier in the year. On June 8, 2026, the KOSPI plunged 9% within three minutes of the open and triggered a circuit breaker after Broadcom issued disappointing AI chip guidance, according to Bloomberg. That episode illustrated how sensitive the market had become to any sign that the AI rally’s underlying assumptions might be flawed. A Bloomberg opinion piece noted that “the selloff reflected how much of the AI rally rests on untested assumptions about endless demand” for memory chips.
The Korea Exchange’s decision to activate a sell-side sidecar and halt program trading temporarily, as reported by CNBC, underscores the scale of the move. Circuit breakers have become a regular feature of South Korean trading in 2026, a sign of the extreme volatility surrounding the AI trade and its key beneficiaries.
Sources
- Reuters — KOSPI decline of 10.84%, closing price, and circuit-breaker timing
- CNBC — SK Hynix and Samsung percentage losses, Korea Exchange circuit-breaker activation
- The Guardian — SK Hynix and Samsung declines, AI spending and Chinese competition concerns
- Wall Street Journal — Asia stocks decline and AI spending concerns
- Yahoo Finance — Analyst commentary on AI infrastructure financing and valuation concerns
- Strait Times — Analyst commentary on AI infrastructure financing, China competition, and valuation risks
- Investors.com — KOSPI decline from June 22 peak
- Bloomberg — June 8 KOSPI decline and Broadcom guidance impact; commentary on untested AI demand assumptions
