South Korean Stocks Tumble 6 Percent as Chip Selloff Deepens

October 13, 2026 - 13:00

South Korea's benchmark KOSPI index fell 6 percent on Tuesday, extending a sharp decline driven by heavy losses in semiconductor stocks. The drop marks one of the largest single-day declines for the market this year and reflects growing unease among investors about the future of the memory chip business.

Micron and SK Hynix shares both slid during the session, with SK Hynix among the biggest drags on the index. The selloff spread across much of the technology sector as traders reacted to signs that Chinese chip makers are accelerating production and closing the technology gap with established suppliers. That shift threatens the pricing power that South Korean manufacturers have enjoyed for years.

Analysts pointed to a combination of factors behind the decline. Rising output from Chinese competitors could add pressure to already soft demand for memory products used in consumer electronics. Some investors also cited caution ahead of upcoming earnings reports, with several major chip makers expected to offer guidance that may fall short of earlier expectations.

The broader market weakened alongside semiconductors. Automakers and battery producers also posted losses as risk appetite faded. Foreign investors were net sellers, adding to downward momentum.

Market watchers said volatility is likely to continue in the near term. Much depends on whether global demand for chips recovers and how aggressively Chinese suppliers expand. For now, the mood in Seoul remains defensive, with few signs of an immediate rebound.