- Lead. South Korea’s KOSPI index fell 9.99% on June 23, closing at 8,203.84 points — a drop of 910.71 points in a single session. A Level 1 circuit breaker automatically halted all trading for 20 minutes when the index fell 8%, the first such intervention since the COVID-19 panic selloff in March 2020.
- Fact. SK Hynix fell approximately 12.5% and Samsung Electronics fell roughly 12.3% on the day. Together the two companies account for nearly 48% of the KOSPI’s market capitalisation and had contributed around 70% of the index’s gains in 2026 — a year in which the KOSPI was up more than 80% year-to-date before the crash.
- Stake. The selloff erased in one session what had been one of the world’s best equity rallies in 2026, driven by a semiconductor boom that made South Korean chip exports the defining story of the global AI trade.
The immediate triggers for the June 23 selloff were a combination of US technology weakness — the Nasdaq fell 2.21% and the S&P 500 declined 1.44% overnight — and reports that SK Hynix was reallocating manufacturing capacity away from HBM4 high-bandwidth memory toward conventional DDR5 production, suggesting peak AI-chip demand may be behind schedule, according to CNN’s markets coverage. South Korea’s exclusion from the MSCI Developed Markets index review removed a further catalyst for foreign inflows.
The Weight of Leverage
The crash had a structural dimension that magnified its severity. Korean retail investors had accumulated record margin debt of 37.74 trillion won, creating a fragile leverage stack that unwound rapidly once the index began to fall. Foreign investors sold approximately 5.79 trillion won ($3.8 billion) on June 23 alone — against a year-to-date outflow of $62 billion — forcing domestic retail investors to absorb selling pressure they had financed with borrowed money.
The ripple effects were felt across Asia: Japan’s Nikkei 225 fell 3.5%, the CSI 300 declined 2.8%, and Hong Kong’s Hang Seng fell 1.8%. The broader selloff reflected how closely AI enthusiasm had been priced into global markets — with the combined private valuation of Anthropic and OpenAI alone at $1.8 trillion — and how quickly that pricing can reverse.
Recovery and Context
By the morning of June 24, the KOSPI had recovered approximately 3%, with Samsung rebounding roughly 7% from its lows. South Korean financial authorities pledged intervention to address volatility and currency pressure. The underlying economy remains resilient — semiconductor exports surged 169.4% year-on-year in the first 20 days of June — but that export concentration, with semiconductors now accounting for 42% of all South Korean exports, is itself the source of the market’s structural fragility.