South Korean Tech Stocks Plummet Amid AI Concentration Risks

South Korean equity markets experienced a severe selloff on July 2, 2026, with the Kospi Index falling up to 7 percent. The crash followed a report from S&P Global Ratings stating that corporate earnings in South Korea are suffering from imbalanced growth, with strength heavily concentrated in the semiconductor sector. While the agency forecasted that an AI-driven memory supercycle would support earnings for firms like Samsung Electronics and SK hynix through 2028, the concentration of growth sparked investor anxiety.

Market volatility intensified after BlackRock Inc. downgraded emerging-market equities, citing concentration risks in AI-related companies. Samsung Electronics and SK hynix both saw shares drop at least 8 percent as reports emerged that Meta Platforms Inc. plans to sell AI computing power via a new cloud business, raising fears of sector overcapacity. Further pressure mounted as Apple Inc. began negotiating chip purchases from Chinese firms ChangXin Memory Technologies and Yangtze Memory Technologies, threatening the competitive edge of Korean suppliers.

The decline mirrored steep drops in U.S. semiconductor stocks, including Micron Technology and Sandisk Corp., and extended to Japan's Kioxia Holdings Corp. In response to the instability, the Korea Exchange temporarily suspended program selling of Kospi futures to curb the plummet.