South Korea's benchmark Korea Composite Stock Price Index (KOSPI) plummeted 519.09 points, or 5.81 percent, to close at 8,411.21 on Friday, 26 June, as investors aggressively locked in profits following a blistering AI-driven rally. The index had surged 5.42 percent on Thursday and 3.26 percent on Wednesday, making Friday's reversal a sharp but not entirely unexpected correction.

Circuit Breaker Triggered as Losses Deepened

The KOSPI opened 1.31 percent lower and rapidly extended its decline, at one point falling more than 8 percent to an intraday low of 8,126.84. The severity of the slide prompted the bourse operator to activate a circuit breaker at 12:10 p.m., halting trading of KOSPI shares for 20 minutes to prevent a disorderly rout. Trade volume was exceptionally heavy at 508.9 million shares worth 51.5 trillion won (approximately US$33.5 billion), with decliners sharply outnumbering gainers at 777 to 111.

Semiconductor Stocks Bear the Brunt

Chipmakers were the hardest hit. Samsung Electronics, the world's largest memory chipmaker, tumbled 5.3 percent to 339,500 won, while runner-up SK hynix slumped 8.36 percent to 2.67 million won. SK Square, the parent company of SK hynix, plunged 9.43 percent to 1.72 million won. Samsung Electro-Mechanics, an electronic-components affiliate of Samsung Electronics, shed 0.2 percent to 1.99 million won.

Financial stocks also declined. Hana Financial Group sank 3.77 percent to 109,700 won, and Samsung Securities skidded 6.32 percent to 103,800 won.

What Spooked the Market

The sell-off was partly triggered by overnight developments on Wall Street, where tech heavyweights finished mixed. Micron Technology jumped 15.7 percent on strong earnings, but Apple dropped 6.1 percent after the company raised prices on many of its products due to expensive memory chips — a move that rattled sentiment across the supply chain.

Han Ji-young, an analyst at Kiwoom Securities, said: 'Investors are worried that too expensive memory chips would raise prices of end-use products and undermine demand for memory chips, and that would discourage tech companies from increasing large-scale AI investment.' The concern reflects a broader anxiety: that the AI investment supercycle could hit a speed bump if hardware costs squeeze returns for downstream buyers.

Foreign and Institutional Selling Dominated

Foreigners sold a net 4.6 trillion won worth of shares, while institutions offloaded a net 3.8 trillion won. Retail investors moved in the opposite direction, scooping up a net 8.2 trillion won — a pattern consistent with individual investors buying the dip during institutional exits. The Korean won, meanwhile, strengthened, quoted at 1,532 won per US dollar as of 3:30 p.m., up 10.7 won from the previous session.

What Comes Next

The KOSPI's three-day swing — up nearly 9 percent over Wednesday and Thursday before giving back more than half those gains on Friday — underscores the volatility embedded in AI-theme trades. Market watchers will closely monitor US Federal Reserve signals, global memory chip pricing trends, and any further guidance from major tech firms on capital expenditure plans, which remain the primary driver of South Korea's semiconductor-heavy index.