KOSPI plunges again, triggering circuit breaker amid Asia tech rout

South Korea's Kospi tumbled as much as 9% on Friday, prompting the Korea Exchange to suspend trading for the second time this week, as a cascade of concerns over rising component costs and the outlook for AI investment sent shockwaves through Asia-Pacific markets.

The sell-off was sparked by Apple ↗ 0.86% raising prices on all Macs, iPads, home devices, and the Vision Pro headset on June 25, seeking to offset cost hikes caused by a shortage of memory chips and storage. Apple's shares had fallen 6.1% in Thursday's U.S. session — their largest single-day drop since April 2025. A New York Times report that OpenAI is leaning toward delaying its initial public offering until 2027 compounded the damage, hitting SoftBank Group, which fell as much as 14% in Tokyo.straitstimes+1

Chipmakers Bear the Brunt

Samsung Electronics and SK Hynix both slid more than 8%, while Japan-based Kioxia Holdings sank as much as 12%. The sell-off capped a week of extreme volatility for the Korean market, which saw a 10% crash on Tuesday that also triggered a circuit breaker.cnbc+2

"Markets are no longer treating memory strength as an automatic positive for the whole AI trade," said Charu Chanana, chief investment strategist at Saxo Markets. "The risk is that a stronger memory cycle today starts to slow the broader AI trade tomorrow. And the market is starting to price that."straitstimes

Broad Regional Rout

Japan's Nikkei 225 sank 4.7%, Taiwan's TAIEX fell 3%, and Hong Kong's Hang Seng declined more than 2%. Nasdaq 100 futures dropped 1.2% while S&P 500 futures slid 0.6%. Microsoft ↘ 1.65% also announced a third price increase for Xbox consoles on Thursday, underscoring the component shortage pressuring consumer technology.investinglive+1

The Friday halt marked the latest in a string of circuit breakers this year for the Kospi, which despite its turbulence remains sharply higher year-to-date on the strength of the AI and memory chip boom. Samsung and SK Hynix are preparing to announce investments worth hundreds of billions of dollars at a presidential summit on June 29.straitstimes+1

"While US chipmakers are finding a floor on localised corporate updates, Asian semis — the heavy-lifting infrastructure backbone of the AI supply chain — are bearing the brunt of the regional risk-off unwind," said Francis Tan, Asia chief strategist at Indosuez Wealth.straitstimes