Samsung Electronics collapsed 10.2 percent to 295,500 won (US$192.4) and SK Hynix fell 7.7 percent to 1,911,000 won, the two memory-chip makers alone accounting for most of the decline.
Yet the session was not a uniform liquidation. Naver, the country's largest internet platform, surged 9.2 percent to 279,000 won, a near-mirror image of the chip names as investors fled hardware and piled into the businesses the artificial intelligence build-out had left behind.
That split was the story. Trading halted on both the KOSPI and the junior KOSDAQ as each tripped a circuit breaker, a mechanism that suspends all trade for a set period once an index falls past a preset threshold, the breakers and a sidecar firing together for only a handful of times this year.
The KOSPI plunged as much as 8.8 percent to an intraday low of 7,442.7 before clawing back a sliver of the loss, while the KOSDAQ, home to smaller technology and biotechnology names, fared worse still, closing down 9.1 percent at 911.4. Beneath the headline crash, money tore along a single fault line, punishing the AI hardware trade that has led Korean equities for months while rewarding the platform and internet names that rally had crowded out.
Foreign investors, the source of weeks of net selling, turned buyers into the close. Overseas funds bought a net 297.6 billion won of stock by the bell, while domestic individuals sold 124.4 billion won and institutions sold 146.7 billion won, a reversal from earlier in the session when foreigners had been heavy sellers.
The late turn suggested some overseas money treated the crash as an entry point rather than an exit, even as the breadth of the decline stayed overwhelming, with 1,634 stocks falling against just 75 gainers.
The trigger was external. A Friday rout in US chip shares carried across Asia, and the damage tracked semiconductor exposure market by market. In Tokyo, the Nikkei 225 fell 3.9 percent to 64,024.6, dragged down by chip-equipment makers Tokyo Electron, off 7.8 percent, and Advantest, down 6.3 percent, with SoftBank Group falling 7.8 percent.
The Shanghai Composite proved far more resilient, easing 1.5 percent to 3,968.8 as Chinese chip names including Cambricon Technologies and NAURA Technology fell only modestly, a sign the selling concentrated where exposure to the global AI hardware cycle ran deepest.
South Korea sat at the center of that exposure. The KOSPI leans more heavily on its two memory-chip makers than any major regional index leans on its semiconductor names, which is why Seoul fell hardest even though the shock originated on Wall Street. The depth of the drop reflected the index's construction as much as the day's sentiment, a structural vulnerability that turns a global chip selloff into a domestic rout.
Currency markets did not amplify the stress. The won firmed sharply, with the dollar buying 1,535.9 won, down 23.6 from the prior reference. A stronger won removes one channel through which a selloff can feed on itself, and the foreign buying into the close pointed the same way, suggesting overseas investors were not fleeing Korean assets wholesale so much as repricing a single trade.
Naver's surge offered the clearest read on where the money went. As investors dumped the memory makers, they rotated into a platform business whose valuation does not hinge on the price of high-bandwidth memory, the specialized chips that stack DRAM for AI servers and that have driven the Samsung and SK hynix rally. For one session at least, the trade that had powered the KOSPI to its highs ran violently in reverse.
For all the severity of the headline number, Monday was less a verdict on Korean equities than on a single crowded trade. The market did not sell everything. It sold chips, and it bought what chips had displaced. Whether Naver's jump marks the start of a durable rotation or a one-day scramble for cover will turn on whether the AI hardware selloff that began on Wall Street has found a floor, or merely a pause.
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