South Korea’s benchmark KOSPI index plummeted another nearly 6% on Wednesday, extending a brutal semiconductor sector selloff that was aided by SK Hynix Inc.‘s (NASDAQ:SKHY) profit miss, despite record-breaking second-quarter financial results. The index has slipped over 33% in July and posted the worst two-day fall in history.
Index Bleeds From 52-Week Highs
The heavy losses compound a horrific month for South Korean equities. Following a massive nearly 11% crash on Tuesday, the KOSPI’s latest 5.99% slide pushes the index significantly lower, falling over 39.66% from its 52-week high of 9,385.59.
Because heavyweights Samsung Electronics and SK Hynix account for more than half of the KOSPI’s total weighting, the index has become a direct proxy for global AI hardware sentiment. While SK Hynix fell 9.61%, Samsung slid 5.23% on Wednesday, both contributing to KOSPI’s decline.
This increasing alignment strips investors of key portfolio shields, erasing the geographic diversification benefits they previously sought in the Asian market. According to market commentator Barchart and Reuters, South Korea’s KOSPI closed after a historic two-day plunge, with losses of more than 12.6%, marking one of the worst two-day declines in the index’s history.
JUST IN 🚨: South Korea's Stock Market now on track for its largest 2-day decline in history 📉📉 pic.twitter.com/eKhoVUKnLm
— Barchart (@Barchart) July 29, 2026
Record Profits Eclipsed by Market Fear
The sweeping selloff occurred precisely as SK Hynix delivered record earnings despite a profit miss. During its second quarter earnings call, SK Hynix reported that strong demand for AI infrastructure drove a 51% quarter-on-quarter revenue increase; from a year earlier, revenue rose 257%, more than triple, to a record 79.32 trillion KRW ($54.53 billion). The company also achieved an all-time high operating margin of 76%.
The South Korean chipmaker reported operating profit of 60.54 trillion KRW ($41.62 billion), up 557% from a year earlier, but below the 64 trillion KRW ($43.99 billion) forecast compiled by LSEG SmartEstimate.
The memory-chip maker also noted that its enterprise SSD revenue increased twofold from the previous quarter, and revenue from high-capacity enterprise SSDs expanded more than threefold.
Despite these robust figures, investors aggressively dumped the stock. Market sentiment was severely dampened by the blockbuster IPO of China’s ChangXin Memory Technologies (CXMT) and reports of Chinese state-backed breakthroughs in lithography equipment.
The Threat of Foreign Rivals
Analysts pointed out that future competitive threats are heavily outweighing the South Korean chipmaker’s current successes.
According to Reuters, “The market’s concern lies less in CXMT’s current earnings and more in its potential for accelerated capacity expansion to rival Korean companies and technology development following its IPO,” said Kim Seok-hwan, a Seoul-based market analyst at Mirae Asset Securities.
To address these overarching market concerns, SK Hynix executives emphasized that AI technology is evolving into an agentic form, which will continue to drive a structural shift in demand where both AI memory and conventional memory grow together. Nevertheless, the relentless tech slump continues to heavily drag down the broader Korean stock market.
How Have KOSPI and SK Hynix Performed?
While the KOSPI Composite Index fell 33.10% since June 30’s close and 16.66% over the last five sessions, it returned 34.44% on a year-to-date basis. It closed 5.99% lower at 5,663.24 points on Wednesday.
Meanwhile, SK Hynix was 9.61% lower in Wednesday’s session on the Korean market, up 115.21% YTD, but down 46.69% over the month and 23.44% over the last five sessions.
The U.S.-listed ADR, on the other hand, closed 8.98% lower at $130.17 on Tuesday, and it was 23.43% lower since its recent listing.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
