South Korea's KOSPI Crashed 10% and Triggered a Second Circuit Breaker in a Week: Here's What Happened

Friday's Second Circuit Breaker (June 26)

On June 26, the KOSPI crashed another 8.18%, triggering a circuit breaker at 12:10 p.m. KST . The Korea Times reported this was the fifth circuit breaker activation of the year . The sell-side was fueled by "heavy foreign and institutional selling over concerns of slowing memory demand amid broad chip-flation" .

What Caused the Sell-Off

1. Global Semiconductor and Memory Chip Correction

A broad-based rout in global semiconductor shares and growing fears that the memory chip earnings cycle had peaked spurred panic selling . The crash was described as a "direct window into the fragility sitting underneath the global AI trade" . The KOSPI had been up roughly 90% year-to-date before the rout, making it particularly vulnerable to a sharp reversal .

2. Apple Price Increases

On June 17, Apple CEO Tim Cook confirmed that "price increases are unavoidable" across Apple products due to an ongoing global RAM/memory supply shortage . Then, on June 25—just two days after Black Tuesday—Apple enacted those hikes. Mac computers jumped 15% to 20% in price, and iPads increased 15% to 25% . The MacBook Air, for example, rose from $1,099 to $1,299, and the MacBook Pro from $1,699 to $1,999 . Apple said it "could no longer shield customers from soaring memory and storage chip costs driven by the AI industry's datacenter buildout" . This amplified fears that elevated memory costs were hurting downstream consumer demand .

3. OpenAI IPO Delay

On June 25, the New York Times reported that OpenAI is leaning toward postponing its highly anticipated IPO until at least next year, and possibly to 2027 . Advisers presented options including waiting until 2027 for a $1 trillion valuation or lowering the target for a quicker listing . The delay signaled weakening near-term monetization expectations for the AI sector and hit sentiment hard. SoftBank Group shares tumbled 12% on the news, given SoftBank's large backing of AI ventures .

4. Fed Rate Hike Fears

Surging bets on a Federal Reserve double rate hike added to macro jitters . Global equities experienced a downturn driven by investors preparing for more stringent Fed actions to combat inflation, according to Reuters .

5. Leveraged Bets Compounding Losses

An increase in leveraged retail positions likely amplified the downside volatility, as Bloomberg noted that "intraday gyrations ran up the most in a month and an increase in leveraged bets likely compounded volatility" .

Hardest-Hit Companies

• Samsung Electronics and SK Hynix: These two memory-chip giants were ground zero of the semiconductor exodus. Both tumbled around 8–9% on June 8 and more than 10–12% on June 23 .
• Kioxia: The Japanese memory chip maker was among the hardest hit, along with other chip-equipment and AI-linked names across the region .
• SoftBank Group: Fell 12% on the OpenAI IPO delay news .
• Other large-cap names including Samsung SDI (-9%), LG Electronics (-12.7%), and Hyundai Motor (-10%) also suffered severe losses .

Asia-Pacific Market Performance (June 23)

India's Sensex and Nifty declined roughly 0.7–0.8% , and Shanghai finished in the red .

Broader Market Implications

U.S. Futures and Wall Street

Overnight signals from Wall Street indicated that tech and AI sectors "may have become over-extended after recent rallies," and U.S. tech stocks including Nvidia and Tesla experienced significant declines . The Nasdaq led the declines on Wall Street, burdened by semiconductor stocks as investors booked profits .

Expert Commentary — A Shift in Sentiment on Memory Chips and the AI Trade

Analysts at Investinq characterized the crash as a "direct window into the fragility sitting underneath the global AI trade" . The rout marked a sharp reversal after a record-breaking AI-fueled rally. One market summary described the trigger as "disappointing semiconductor forecasts" combined with "Middle East tensions and a Wall Street selloff" .

The combination of Apple's price hikes (transmitting memory-cost pain to consumers), OpenAI's IPO delay (casting doubt on AI monetization timelines), and Fed rate-hike fears caused a synchronized repricing of risk across the semiconductor supply chain.