Semiconductor Giants Plunge as Circuit Breaker Triggered for 8th Time This Year

[Anchor]

The KOSPI plummeted by more than 9% today (July 28), triggering a circuit breaker—a market stabilization measure—for the 8th time this year. The sharp decline was heavily driven by concerns over an oversupply of memory chips from China, compounded by Nvidia's stock plunge on Wall Street the previous day following controversy over AI circular trading.

Reporter Lee Tae-gwon has the details.

[Reporter]

Both the KOSPI and KOSDAQ plunged immediately after the market opened, leading to successive sell sidecars that temporarily suspended program-based sell orders.

In particular, the KOSPI opened down 5.2% from the previous day at 6,400 and extended its losses to plunge more than 8%, triggering a circuit breaker that halted trading for 20 minutes and pushing the index below the 6,300 level.

The index retreated to levels seen three months ago. This marks the 8th circuit breaker of the year and the first in 10 trading sessions since the 13th of last month.

Semiconductor giants SK Hynix and Samsung Electronics nosedived by 11% and 9.4%, respectively, falling to 1,616,000 won and 230,000 won.

Foreign investors led the market downturn by net selling more than 2 trillion won.

Market analysts attribute the drop to deepening concerns over global memory competition, sparked by reports that China has begun developing deep ultraviolet (DUV) lithography equipment used in semiconductor manufacturing.

Concerns were also raised that supply and demand for domestic semiconductor stocks could shrink after CXMT, a Chinese DRAM manufacturer listed on the Shanghai Stock Exchange the previous day, surged more than 500% above its IPO price.

Adding fuel to investors' worries was the controversy surrounding AI circular trading, which flared up after U.S. semiconductor firm Nvidia announced it would guarantee up to $250 billion in long-term data center leases for OpenAI.

Critics point out that a circular structure—in which Nvidia lends money to customers like OpenAI, who then use those funds to purchase Nvidia chips for data centers—could inflate corporate valuations.

Amid these developments, the market is paying close attention to whether the earnings reports of major semiconductor firms, including SK Hynix starting tomorrow, can serve as a catalyst for a rebound.

(Video reporting: Choi Dae-woong, Video editing: Won Hyung-hee)
※ Please note: This article was translated by AI and may contain errors.