South Korea's stock market has suffered its worst month on record. The KOSPI index fell approximately 23% in July 2026, wiping out roughly ₩250 trillion in market capitalization.
The collapse was triggered by a sudden reassessment of AI chip demand. Markets had previously priced in limitless appetite for semiconductors. When cracks appeared in that narrative, the sell-off was brutal.
The KOSPI peaked at 9,114 in June, driven by AI and semiconductor euphoria. It fell below 8,000 points in early July. On July 13, the index plunged 8.95% in a single session, closing at 6,806.93.
The decline triggered a record seven circuit breakers by mid-July. These automatic trading halts are designed to prevent panic selling.
Market heavyweights Samsung Electronics and SK Hynix were at the center of the downturn. Both stocks regularly posted single-day declines of 9% to 12%.
Foreign investors and institutions added selling pressure. The dynamics of leveraged ETFs, popular among Korean retail investors, amplified the downturn. Their mechanical rebalancing into a falling market created a feedback loop.
South Korea's market is a bellwether for global tech demand. Samsung and SK Hynix produce a massive share of the world's memory chips.
The record number of circuit breakers is prompting concern among global regulators about leveraged and inverse ETF products.