Archive · 11 Oct 2026
Korean Stocks Lose Investors as AI Trade Cools
South Korea’s stock market did very well earlier this year because investors were excited about artificial intelligence.
Much of that excitement centered on two companies that make memory chips, Samsung Electronics and SK Hynix.
Now, investors are less sure that the chip boom will keep going.
Many foreign investors have pulled money out, and local investors have also become more cautious.
The Kospi has fallen, even as some other AI-related markets have reached new highs.
Some investors think Korean stocks are now cheap and could be a good buy.
Others prefer Taiwan because more parts of its technology industry benefit from AI spending.
South Korea’s stock market has lost momentum after leading major equity markets in the first half of the year.
The Kospi has fallen 22% in the second half, while turnover has dropped 70% from its late-May peak.
Foreign investors have withdrawn $131 billion from Korean stocks this year, the largest outflow among major Asian markets.
Samsung Electronics and SK Hynix, which together make up more than half of the Kospi, face doubts about the durability of memory-chip demand.
Some investors still see value in Korean chip stocks, while others prefer Taiwan for its broader AI hardware supply chain and stronger earnings outlook.
- Who
- South Korean stock investors, including foreign funds and local retail investors, and companies Samsung Electronics and SK Hynix.
- What
- Korean stocks are struggling to attract buyers amid falling share prices, reduced trading, and investor doubts about the memory-chip boom.
- When
- The article describes market conditions this year, including a downturn in the second half and trading data from recent months.
- Where
- South Korea’s stock market, especially the Kospi.
- Why
- Investors are questioning the durability of memory-chip demand, while funds have shifted toward US equities and some investors favor Taiwan’s broader AI supply chain.
Reasons to remain cautious
Reasons to remain optimistic
Memory-chip investment outlook
Reasons to remain cautious
Some investors say the easy gains from the memory-chip trade have already been made and question how long the boom will last.
Reasons to remain optimistic
Other investors see memory-chip stocks as inexpensive at current earnings and expect AI spending and chip profitability to hold up.
Where to invest in AI
Reasons to remain cautious
Some investors favor Taiwan, citing its broader technology hardware ecosystem and stronger earnings outlook.
Reasons to remain optimistic
Others see buying opportunities in South Korea, where AI-related chipmakers and the corporate-value initiative could support stocks.
- Korean stock market value
- $4.3 trillion
- Kospi performance
- Down 22% in the second half after being the best-performing major equities benchmark in the first half
- Turnover
- Down 70% from its peak in late May
- Foreign withdrawals
- $131 billion from Korean stocks this year, the most among major Asian markets
- Chipmaker share of Kospi
- Samsung Electronics and SK Hynix together account for more than half of the index’s weighting
- Planned buybacks
- Combined stock buybacks of 55 trillion won by Samsung Electronics and SK Hynix are nearing completion
- Taiwan’s Taiex
- Up 70% this year and ahead of the Kospi by about 23 percentage points last quarter