Trading in South Korea’s KOSPI was briefly halted on Thursday after a sharp selloff in major semiconductor stocks pushed the index sharply lower.
The decline followed a broader global rout in technology shares, with concerns about artificial intelligence demand placing heavy pressure on the country’s largest chipmakers.
KOSPI Trading Halted After Sharp Market Drop
The KOSPI fell more than 6% to 7,769.16 points shortly after the market opened.
The rapid decline triggered a sell-side sidecar, which temporarily suspended trading for five minutes.
A sidecar mechanism is designed to slow extreme market movements and give investors time to reassess conditions during periods of intense volatility.
Chip Stocks Drive KOSPI Volatility
Thursday’s trading pause was the latest in a series of volatility-related halts on the South Korean stock market this year.
Samsung Electronics and SK Hynix have been central to these sharp market swings.
Both companies benefited from strong demand for memory chips used in artificial intelligence systems. Their large weighting in the KOSPI also gave them significant influence over the index.
As their share prices climbed, the two companies became major drivers of the KOSPI’s strong performance.
However, negative AI news has repeatedly caused sudden declines in both stocks, placing pressure on the wider market.
Samsung and SK Hynix Shares Tumble
Samsung Electronics shares fell 7.3% on Thursday, while SK Hynix dropped almost 9%.
The losses followed a report from The Information claiming that OpenAI had developed software improvements capable of cutting AI model inference requirements by half.
Inference refers to the computing power needed for an AI model to process requests and produce responses.
More efficient software could reduce the number of advanced processors required to operate AI systems, potentially weakening future demand for AI-related chips.
Meta Report Adds to AI Chip Concerns
Investor anxiety also increased following reports that Meta Platforms planned to sell excess cloud computing capacity.
The development raised concerns that companies may be able to generate more performance from their existing hardware.
As a result, some businesses could delay purchases of newer and more expensive processors.
This possibility added to fears that the rapid growth in AI chip demand may begin to slow.
Apple Report Pressures Memory Chipmakers
Memory chip stocks faced additional pressure from reports involving Apple.
The company was reportedly negotiating to purchase memory chips from Chinese manufacturers that had been placed on a blacklist.
The talks were linked to rising cost pressures caused by elevated memory chip prices.
Any shift toward cheaper Chinese suppliers could increase competition and affect demand for products made by Samsung Electronics and SK Hynix.
AI Stock Rally Loses Momentum
Chip and artificial intelligence stocks were among the strongest contributors to the KOSPI’s rally earlier this year.
However, that momentum has weakened in recent weeks.
Investors have started questioning whether AI and semiconductor stocks can continue rising after recording substantial gains.
Concerns about valuations, slowing chip demand, and improving software efficiency have added to market caution.
KOSPI Remains Sharply Higher in 2026
Despite Thursday’s steep decline, the KOSPI remained almost 83% higher for the year.
The strong annual performance highlights how heavily South Korea’s stock market has benefited from investor enthusiasm surrounding artificial intelligence and semiconductor demand.
However, the latest selloff also demonstrates the risks created by the index’s growing dependence on a small number of major chip companies.
