AI Trade Correction Sends South Korean Stocks Into Technical Bear Market

As the global artificial intelligence boom gathered momentum, South Korean semiconductor giants Samsung Electronics and SK hynix became magnets for global capital because of their key chip and high-bandwidth memory technologies. Together, the two companies account for as much as 54% of the Korea Composite Stock Price Index (KOSPI). Their share prices and industry demand have long been viewed as important indicators of the health of the global AI technology sector.

Concerns over returns on AI investment, however, triggered a sharp correction in South Korean stocks in July 2026. After reaching an intraday record of 9,385.59 on June 19, the KOSPI plunged more than 20% in less than a month, pushing it into a technical bear market. Its forward price-to-earnings ratio also fell to a historic low of about six times. The sell-off prompted panicked exits by retail investors using leveraged products and margin financing, reflecting concerns about the market's future growth momentum.