South Korea’s stock market index, the KOSPI, triggered its second circuit breaker in one week amid trading in artificial intelligence chips, shaking global markets.
An intraday decline of 8.19% on Friday prompted another 20-minute pause and pulled Wall Street, Tokyo-listed SoftBank and Tokyo-listed shares sharply lower.
This series is now the clearest sign that exposure to AI chips has become the main risk factor for global stocks.
What led to KOSPI’s recent hiatus
A circuit breaker is an emergency market mechanism that temporarily stops trading when an index falls too sharply over a short time frame. The Korea Exchange launched one on Friday at 12:10 PM local time after The KOSPI index remained more than 8% below the previous close. For at least one minute.
The index fell by 731.97 points, to 8198.33 points at the time of the suspension. As a result, traders watched in real time as the index hit its fifth circuit breaker of 2026.
Furthermore, this was only the second time that both the for-sale sidecar and the circuit breaker had been activated in the same session.
The KOSPI closed at 8411.21, down 5.81% on the day. Samsung Electronics shares fell 5.30%. to 339,500 won (~$248), while SK Hynix shares fell by 8.36%. to 2.673 million won (~$1,950).
Both chipmakers represent roughly half of the index’s market capitalization, significantly amplifying the broader index’s movement.
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Capital outflows were severely affected. Foreign investors disposed of a net 4.62 trillion won (about $3.4 billion) during the session. Institutional investors followed with another 3.78 trillion won (about $2.8 billion) in sales.
However, retail investors took the opposite side, buying a net worth of 8.19 trillion won (about $6.0 billion) as they doubled down on the long-term AI infrastructure thesis.
The ring goes down Just three trading days after Tuesday’s 9.99% collapse. That previous session triggered the first circuit breaker of the week, sending shares of Samsung and SK Hynix down more than 12% each.
As a result, KOSPI volatility has now reached levels rarely seen since the index’s inception.
How AI chip trading drives global risk
Catalysts for selling on Friday It was a layered mix of memory chip concerns. Concerns about slowing demand and pricing tensions between Apple and Micron led to early selling.
Furthermore, renewed concerns about AI infrastructure costs and potential delays in OpenAI’s IPO have exacerbated the issue.
Profit taking sharply exacerbated this movement. The Kospi index rebounded 5% on Wednesday And another 3% on Thursday after the initial collapse on Tuesday. As a result, passive funds tracking semiconductor-heavy indexes rotated aggressively, generating waves of forced selling across every chip-related name in Seoul.
The ripple effects reached far beyond Korea. Nikkei 225 index fell 4.15% On Friday, it reached 69,360.83, completely erasing Thursday’s gains and surrendering to the 70,000 level.
Furthermore, SoftBank stock fell more than 12% in Tokyo, pressured by reports about the timeline for OpenAI’s IPO that are circulating on global wires.
Wall Street clearly felt the action. The Nasdaq Composite closed on Friday with its fifth consecutive losing session. The index fell 4.6% during the week. Moreover, the S&P 500 lost nearly 2% over the same period, while the Philadelphia Semiconductor Index continued its global trajectory that had already swept through Asia and Europe.
The analyst’s commentary portrays the situation as a focus story. With Samsung and SK Hynix accounting for more than half of KOSPI, every step in memory chips becomes an index-level event.
As a result, KOSPI-linked products now behave less like a benchmark for Korean stocks and more like a pure proxy for AI chip sentiment.
The broader takeaway is structural. AI infrastructure spending, memory pricing, and the timing of major IPOs are now driving the entire global risk picture.
Until the AI ​​chip trade finds a firmer footing, circuit breakers in Seoul will continue to appear as the first warning sign for every end market.
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