Kospi Falls 5.5 Percent as China Chip News Hits Samsung, SK Hynix

Updated 13:35 UTC

NEW YORK: The selloff reached Wall Street at the open on Tuesday. The Invesco QQQ fund, which tracks the Nasdaq 100, fell 1.6 percent to 739.27 dollars, down from a previous close of 751.27 dollars. Reuters reported Nasdaq 100 futures down 0.51 percent at 5:50 a.m. Eastern, with Micron down 2.8 percent before the bell and Western Digital, Seagate and SanDisk down between 3.5 and 4.5 percent each. The Wall Street Journal reported Nasdaq futures down 0.7 percent, with Micron down 4 percent and SanDisk down 5.2 percent in premarket trade. Both outlets traced the fall to the same cause that hit Seoul: CXMT's memory breakthrough in China, and Broadcom chief executive Hock Tan's comment that some of the money flowing into AI looks like casino gambling.

SEOUL: South Korea's Kospi index closed down 5.5 percent on Tuesday, October 13, in the worst day of a selloff that has cut the index by about a tenth in five sessions. Trading was paused at one point as selling deepened. The fall centered on two stocks. Samsung Electronics closed down 7.39 percent at 232,000 won. SK Hynix closed down 10.09 percent at 1.443 million won. Together the two chipmakers account for more than half of the Kospi by market value, so a bad day for both is a bad day for the whole index.

The trigger came from China. ChangXin Memory Technologies, known as CXMT, reported progress over the weekend on a memory cell design called 4F2. The design packs each memory cell into a smaller area. TrendForce estimates it could raise memory density by 30 to 50 percent. CXMT plans to ship a server memory product built on the design, a DDR5 RDIMM module, before the end of 2026. Server memory is a high value market where Samsung and SK Hynix make much of their profit.

Selling had already started

Tuesday was not the start of the rout. The Kospi fell about 3.7 percent on Monday, October 12, and chip shares slid in New York the same day. Micron fell 3.9 percent on Monday and SanDisk fell about 6 percent. Foreign investors sold a net 341.4 billion won of Korean shares in early Tuesday trade, according to market reports. Analysts in Seoul also pointed to a quieter factor. Samsung has finished a share buyback program used for employee stock pay, and SK Hynix's buyback and cancellation program is near its end. A steady buyer has stepped back at the same moment a new rival stepped forward.

Comments from California added pressure. Broadcom chief executive Hock Tan compared investors betting on artificial intelligence to casino gamblers, The Wall Street Journal reported. The remark landed on a sector that has run far and fast. The Kospi is still up about 45 percent for 2026, even after this week's losses.

Asia follows Seoul down

The selling spread across the region. Japan's Nikkei 225 fell 1.8 percent. Taiwan's Taiex fell 1.8 percent. Hong Kong's Hang Seng fell 0.4 percent, and its technology gauge fell 1.5 percent. In Europe, ASML fell 3.2 percent. In US premarket trade, Nasdaq futures fell 0.6 percent, Micron fell 2.5 percent and Intel fell 2 percent.

Why it matters

Memory chips sit inside every AI data center. Samsung, SK Hynix and Micron have held the top of that market for years, and high prices for advanced memory have funded the AI buildout. A Chinese maker that can ship denser server memory changes the pricing math for all three. CXMT holds about 8 percent of global DRAM revenue today. Its high bandwidth memory yields still lag, analysts say, and a design announcement is not a shipping product. But markets price the future first. On Tuesday, they priced a future with a fourth serious rival in it.

What happens next

CXMT has to prove the design in volume production, and it aims to ship by the end of 2026. Samsung and SK Hynix report earnings later this month, and investors will press both companies on their own 4F2 road maps. The next test for chip shares comes in New York on Tuesday, when US trading opens with the selloff still fresh.