SEOUL — South Korean equity markets saw widespread trading suspensions Tuesday as a sharp selloff in the semiconductor sector pulled the KOSPI composite index down 3.2 percent by the close.
Samsung Electronics fell 4.8 percent and SK Hynix dropped 6.1 percent, with losses cascading into automotive and chemical exporters. The Korea Exchange's automated circuit breakers activated multiple times throughout the session to slow the decline.
The move marks the KOSPI's steepest single-day drop since March 2024, when similar concerns about global economic conditions and supply chain disruptions weighed on the index.
The selloff carries outsized implications for South Korea's macroeconomy. Semiconductors account for more than 20 percent of the nation's total export value, and the performance of Samsung and SK Hynix feeds directly into GDP growth projections and trade balance figures. The won depreciated against the U.S. dollar following the market move.
The decline comes despite strong near-term fundamentals. South Korea's semiconductor exports rose 22 percent year-over-year in April, driven by demand for high-bandwidth memory chips used in artificial intelligence data centers. SK Hynix CEO Kwak Noh-jung said in April the company had sold out its high-bandwidth memory production through the end of 2025.
Some analysts argue the selloff overstates near-term demand risk. That booked-out production schedule at SK Hynix suggests the structural case for AI-linked memory demand remains intact, even as market sentiment sours.
The weakness in Korean chip stocks tracked a broader retreat in global technology equities. Nvidia shares fell 5.0 percent Tuesday to $196.51. Tesla dropped 1.2 percent to $309.22.
The Bank of Korea monitors semiconductor export data closely when setting monetary policy. Investors will watch upcoming earnings reports from major chipmakers for detail on demand trends and production forecasts.
