The KOSPI, the main board of the Korea Exchange, closed at 6,296.4, down 4.6 percent, after SK hynix fell 10.4 percent to 1,495,000 won ($1,050) and Samsung Electronics dropped 6.3 percent to 230,500 won ($161.90). SK, the de facto holding company of the memory chipmaker, also lost 9.4 percent.
The two chipmakers are worth roughly half the main board between them, and a weaker than expected quarterly outlook from U.S. storage maker SanDisk overnight was enough to move both.
The index shed 301.9 points. Yet 490 main board stocks advanced against 381 decliners, and the junior KOSDAQ market closed up 0.3 percent at 801.7, reclaiming the 800 line it had lost in the morning.
The concentration shows up in the large cap gauge. The KOSPI 200 fell 5.4 percent to 982.9, well ahead of the broader index.
SanDisk beat on the quarter it had already finished, reporting revenue of $8.97 billion and adjusted earnings of $39.25 per share, then guided current quarter revenue below what analysts had modelled.
The shares fell in extended trading. Investors read the outlook as a statement about memory pricing rather than about one company, and SK hynix, which is jointly developing a flash memory standard for AI servers with SanDisk, took the sharpest end of it.
The Korea Exchange triggered a sell side sidecar at 10:18 a.m., a five minute suspension of program sell orders that activates when KOSPI 200 futures fall sharply. It was the 24th sell side sidecar of the year and the 46th of either direction, against a previous annual record of 26 set in 2008.
SK hynix had signalled the session before it opened. In the pre market run by Nextrade, the alternative trading venue that starts at 8 a.m., the stock printed 1,168,000 won, down 29.98 percent and the daily limit, before the main board opened anywhere near that level.
Foreign investors sold a net 3.33 trillion won ($2.34 billion) on the main board. Individuals absorbed almost all of it, buying a net 3.34 trillion won. Institutions were net sellers of 122 billion won.
That pattern has repeated all week at extreme amplitude. On July 31 the KOSPI posted its largest single day gain on record, 17.9 percent, as foreign investors bought a record 7.24 trillion won. They sold close to 2.84 trillion won of it back the next session, and the index has swung between a 5.1 percent loss, a two day rebound of more than 5 percent, and Thursday's drop ever since.
Money leaving the chip trade did not leave the market. The nonferrous metals sector rose 10.3 percent, the day's strongest, led by Korea Zinc, up 12.7 percent at 1,234,000 won ($866.75) on expectations for higher copper prices and after the smelter posted record first half earnings and announced a quarterly dividend. Precious metals names rose 7.1 percent as a group.
Large caps outside memory held up. LG Energy Solution gained 2.8 percent to 345,000 won ($242.33) and Samsung Biologics rose 1.5 percent to 1,514,000 won ($1,063.43).
Japan took a milder version of the same hit. The Nikkei 225 fell 0.9 percent, with Kioxia, SanDisk's NAND flash manufacturing partner, down 10.2 percent at 48,740 yen. SoftBank Group fell 4.4 percent and Advantest lost 2.3 percent.
The composite index in Shanghai closed modestly higher, supported by energy and telecom names.
The won traded at 1,423.70 per dollar, marginally weaker than Wednesday.
For all the violence of the session, the KOSPI still finished above the 6,257.45 it closed at on Monday.
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