KOSPI Falls 3.6% as AI Funding Worries Hit Samsung and SK Hynix

The index closed at 5,648.79, down 210.29 points, according to Korea JoongAng Daily and Seoul Economic Daily. The tech-heavy KOSDAQ fell 4.08% to 704.39, Seoul Economic Daily reported, barely holding above the 700 level. Decliners outnumbered gainers on the main board by 656 to 220.

Samsung Electronics fell 4.15% to 219,500 won and SK hynix dropped 5.03% to 1,398,000 won. Losses spread across the market's technology names: SK Square fell 5.37%, Samsung Electro-Mechanics 7.38%, Naver 3.65% and Kakao 3.03%. LG Energy Solution lost 5.06%. Oil refiners were among the hardest hit, with S-Oil down 11.77% and SK Innovation down 9.36%, as crude prices fell on hopes of a diplomatic settlement in the Middle East. Samsung Biologics was a rare gainer, up 2.11%.

Foreign Investors Lead the Selling

Foreign investors were net sellers of about 1.5 trillion won on the main board, and institutions sold roughly 511 billion won, according to the two reports. Individual investors bought about 1.7 trillion won, which was not enough to stem the fall.

The sell-off followed a weak session for US technology shares. The Nasdaq composite fell 1.07% and the PHLX semiconductor index dropped 3.4%, after a 7.2% slide on Friday, Korea JoongAng Daily reported.

Why Investors Are Nervous

Analysts pointed to a run of large debt and equity raises by US technology companies to pay for AI build-outs. Seoul Economic Daily cited Oracle's plan to raise $10 billion each in shares and bonds, Meta's bond sale in dollars and euros of a reported $20 billion, and Alphabet's 6 billion euro bond issue.

"The string of corporate bond issues by Big Tech stoked concerns over AI funding," Lee Kyoung-min, an analyst at Daishin Securities, said, according to Seoul Economic Daily. He added that caution ahead of the US midterm elections also limited appetite for risk.

The paper also cited Anthropic's amended IPO filing, which showed quarterly revenue of $17 billion alongside about $895 billion of commitments for AI infrastructure. Analysts said the focus on those costs weighed on AI-related shares.

Kim Seok-hwan of Mirae Asset Securities told Korea JoongAng Daily that "concerns about profitability of AI investments persist," and said the sharp drop in US chip stocks on the first trading day of November had weighed heavily on the Korean market.

What It Means

South Korea's market has become one of the most direct bets on AI infrastructure spending because Samsung and SK hynix supply much of the memory used in AI data centres. The session shows how quickly sentiment can turn when investors shift their attention from AI demand to how that demand is being financed. It also comes after a sharp correction in October, when the KOSPI fell 8% in a single session on concerns about rates and AI debt, according to Bloomberg.