SEOUL, July 28 (AJP) - South Korean stocks plunged Tuesday, triggering the market's 21st sidecar of the month after a fresh rout in U.S. semiconductor shares combined with growing investor bets on China's emerging memory-chip champion to spark another wave of foreign selling.
The Korea Exchange activated a sidecar — a five-minute suspension of program trading designed to cool excessive volatility — shortly after the open as benchmark indices tumbled more than 5 percent.
By 9:30 a.m., the KOSPI had slumped 7.24 percent to 6,263.30, falling below the 6,400 mark for the first time since April 23. The tech-heavy KOSDAQ dropped 5.64 percent to 721.71.
The latest halt marked the 21st sidecar in July, including 12 on the KOSPI market and nine on the KOSDAQ over just 18 trading sessions, according to the Korea Exchange. From July 10 through July 25, a sidecar was triggered for 10 consecutive trading days, underscoring one of the most volatile periods in the market's history.
So far this year, the exchange has activated 66 sidecars, already far exceeding the previous annual record of 45, set during the 2008 global financial crisis.
The selloff followed a sharp overnight decline in U.S. semiconductor stocks, with SK hynix's American depositary receipts (ADRs) tumbling 7.47 percent to $143.02 after falling nearly 10 percent intraday. The ADRs closed below their $149 Nasdaq offering price for the first time since the company's blockbuster U.S. listing earlier this month.
In Seoul, SK hynix fell about 10 percent, while Samsung Electronics slid 8.2 percent by mid-morning.
Adding to the pressure was the strong market debut of China's ChangXin Memory Technologies (CXMT) on Shanghai's STAR Market on Monday.
The rally reinforced investor expectations that China could emerge as a credible new force in the global memory industry, prompting speculation that international funds may gradually rebalance semiconductor holdings toward Chinese chipmakers after years of concentrating on South Korea's AI-driven memory leaders.
While analysts said the immediate impact on foreign fund flows may be limited because CXMT is not yet eligible for trading through the Stock Connect program linking mainland China and Hong Kong, its debut has intensified concerns that the competitive landscape in memory semiconductors is entering a new phase.
The sharp retreat also extended a reversal from this year's AI-fueled rally, which had driven the KOSPI to repeated record highs as investors piled into South Korea's semiconductor exporters on expectations of surging demand for high-bandwidth memory used in artificial intelligence servers. Tuesday's selloff suggested investors are beginning to reassess whether China's rapid technological progress could narrow that advantage faster than previously expected.
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