The Korea Exchange suspended trading to curb volatility after the Kospi dipped below the 6000 mark. The index eventually closed 5.5% lower at 6035.35. Losses were concentrated in Samsung Electronics and SK Hynix, which together represent nearly half of the index's total market value. Samsung shares slid 7.4%, while SK Hynix fell 10%, extending a five-day losing streak.

Market sentiment soured following news that China's ChangXin Memory Technologies (CXMT) plans to introduce a new chip structure with a 30% smaller cell area by 2026. LS Securities analyst Kim Yun-jeong noted that this technological advancement has intensified concerns regarding the long-term dominance of South Korean memory producers. Despite the ongoing AI-driven demand for advanced chips, analysts at KB Securities suggest investors remain wary of the sector's cyclical nature. They warn that current supply bottlenecks could eventually lead to inventory gluts, mirroring historical patterns seen in other pandemic-era sectors. Foreign investors accelerated the decline, acting as heavy net sellers throughout the session and reducing their exposure to the Korean market.