KOSPI Drops 3% on Foreign Semiconductor Sell-Off

Google's TurboQuant Sparks Semiconductor Stock Declines in U.S. and South Korea

The KOSPI index has plummeted by over 3% as foreign investors engage in large-scale net selling in the stock market. While individuals and pension funds are net buying, they are failing to defend the index. Notably, large-cap semiconductor stocks such as Samsung Electronics and SK Hynix are experiencing sharp declines.

While U.S. stocks rose last night as the U.S. and Iran mentioned a 'ceasefire,' Google's announcement of an advanced technology significantly reducing memory usage led to declines in U.S. semiconductor stocks like Micron and SanDisk. This ripple effect is believed to have impacted the South Korean market.

As of 11:30 a.m. on the 23rd, the KOSPI index is trading around 5,470 points, down over 3% from the previous trading day.

The KOSPI index, which started the session lower, initially defended the 5,500-point level in early trading. However, heavy selling by foreign investors, particularly in large-cap semiconductors, broke the 5,500-point support line. As of 11:30 a.m., foreign investors have engaged in net selling of 2 trillion Korean won in the stock market, with net selling also observed in the KOSPI 200 futures market.

Individuals have net bought over 1.6 trillion Korean won, and pension funds maintain a net buying position of 250 billion Korean won, but the index continues to plummet.

The previous day, Google Research unveiled 'TurboQuant,' an advanced quantization algorithm that reduces memory usage of large language models (LLMs) by over sixfold. This new compression technology was developed to address soaring memory demand and supply shortages.

Following the announcement, concerns spread that demand for high-bandwidth memory (HBM) and storage could slow. While U.S. stocks broadly rose last night, Micron and SanDisk shares fell.

This impact has led to significant declines in the electrical and electronics sector in the domestic market, with foreign investors offloading large volumes. Samsung Electronics and SK Hynix are down around 5%, and Hanmi Semiconductor is also falling sharply. Semiconductor component stocks are also weak.

The KOSDAQ index, which opened flat and rose in early trading, has turned downward. As of 11:30 a.m., the KOSDAQ index is trading around 1,140 points, down approximately 1.4% from the previous trading day.