The market shock centered on Samsung Electronics and SK Hynix, the nation’s dominant memory-chip manufacturers. Shares in the two companies dropped 9% and 10% respectively, a critical decline given their combined influence over nearly half of the Kospi’s total market value. This local retreat mirrors a broader global downturn, following a 2.7% drop in the Philadelphia Semiconductor Index.

Analysts point to the recent breakthrough by ChangXin Memory Technologies (CXMT) as the primary catalyst for the instability. The Chinese firm claims to have developed a new chip structure that reduces cell area by roughly 30%, with commercial production slated for 2026. LS Securities analyst Kim Yun-jeong noted that these technological strides have forced a re-evaluation of current market valuations. Compounding the volatility, Broadcom CEO Hock Tan recently warned that many AI-focused investors are operating with extreme expectations, likening the current market environment to a casino. Amidst the panic, foreign investors led the selling spree, far outpacing local buying interest.