South Korean equities experienced a sharp decline on Friday, with chipmaker stocks once again facing heavy selling pressure, highlighting their acute sensitivity to shifts in global sentiment towards the artificial intelligence market.
The Kospi index plunged as much as 8.2%, erasing gains from the previous session and prompting a 20-minute trading halt by the Korea Exchange, marking the second such suspension this week. Shares of Samsung Electronics Co Ltd and SK Hynix Inc each fell more than 9%. Foreign investors offloaded approximately 2.7 trillion won (around $1.7 billion) worth of Kospi-listed stocks during the morning session.
This downturn represents a stark reversal from Thursday's significant rally. The earlier surge was fueled by Micron Technology's optimistic forecast and news of SK Hynix's preparations for a U.S. listing, which bolstered confidence in the sustainability of the AI investment theme. However, investor sentiment subsequently turned cautious as the market digested several new developments, including Apple raising product prices due to a memory chip shortage and concerns that OpenAI might delay its initial public offering until next year.
IG International market analyst Fabien Yip noted that if Apple, one of the world's largest component purchasers, cannot absorb rising costs, it raises serious questions about demand-price elasticity and the sustainability of memory chip profit margins. Yip added that the potential delay in OpenAI's IPO also reflects how tech stock performance remains highly susceptible to fluctuations in retail investor enthusiasm.
In a separate development, reports indicate that Samsung and SK Hynix are preparing to announce new investment plans worth hundreds of billions of dollars on Monday.
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