South Korea’s benchmark KOSPI index just delivered one of the most dramatic boom-and-bust sequences any major stock market has seen in years. After more than doubling in the first half of 2026 on the back of insatiable demand for AI memory chips, the index cratered in late July, wiping out approximately $2.18 trillion in market value over two sessions and posting its steepest monthly decline on record.
On July 30, the KOSPI surged 17.9% in a single day, one of the largest single-session rebounds in any major market’s history.
What happened
South Korea, home to the world’s two dominant memory chip producers, Samsung Electronics and SK Hynix, became ground zero for that trade. Together, those two companies account for over 50% of the KOSPI’s total market capitalization.
On July 29, the KOSPI fell as much as 12.6% intraday before closing down 6%. The trigger was a combination of disappointing earnings context from both chipmakers and broader fears about a slowdown in AI capital expenditures.
